Demolition Market: India’s Approval of the Hong Kong Convention is a Game-Changer

//Demolition Market: India’s Approval of the Hong Kong Convention is a Game-Changer

Demolition Market: India’s Approval of the Hong Kong Convention is a Game-Changer

The demolition market in SouthEast Asia is about to transform over the next few years, after India’s approval of the Hong Kong Convention for the “green” recycling of ships. In its latest weekly report, GMS, the world’s leading cash buyer said that “the big news this week centered around the decisive steps taken by the Indian government, to approve the implementation of the ‘Recycling of Ships Bill, 2019’ and accession to the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009. Prime Minister Narendra Modi has presently approved the proposal and now both houses of Parliament must review and pass the Bill, before it is finally signed into law. The Bill includes restrictions against the installation & use of hazardous materials and IHMs & SRPs (Ship Recycling Plans) will now be a mandatory requirement for any new vessels arriving Alang. Yards will also need to obtain authorization and have permits issued in order to import & recycle vessels and only those up to HKC standards will be able to operate on this basis, once the Bill is signed off by parliament.”

GMS added that “in terms of the market, the positivity witnessed over the previous week or so has sustained as local steel plate prices have reported improvements across the board and all locations finally seem keen to acquire new vessels, at improving levels. Bangladesh has been the most active this week and several highly speculative sales have been reported to Cash Buyers, many of who appear to be getting somewhat carried away with this latest market surge. India is not too far behind Bangladesh, but Alang buyers will have to make do with the raft of HKC green vessels heading their way, as Chattogram is once again displaying a useful knack of aggressively and strategically improving their prices on favored units, in order to blow their competitors out of the water”, GMS concluded.

Meanwhile, in a separate report, Clarkson Platou Hellas added that “a major step forward occurred in the ship recycling industry this week with India acceding to the Hong Kong Convention as the Union Cabinet approved the proposal for enactment of the Recycling of Ships Bill, 2019 and accession to the HKC. This is a major development and warm welcome for the industry as there is a near completion of the number of countries required to ratify the Convention for it to finally become a ‘Binding Bill’. This will be a very positive impact for ship Owners who wish to deliver their vessels to India without any negative press and would give comfort to decisive making as then a full Governmental ratified document would be in place. Meantime, the market this week has shown some promising signs that a recovery may be on the cards as price levels have shown some improvements taking into account some of the levels on the negotiating table. The Bangladesh steel market has witnessed increased rates this week (equivalent of some USD 15-20 per ldt) which has pushed some cash buyers to ‘up’ their game and provide more competitive offers. Whether this increase is supported by the local recyclers remains to be seen but there are more units that have been circulated into the market this week giving a better vibe as we approach the end of the year. Maybe the lacklustre sentiment that was being predicted to continue till the turn of the year will not bear fruition and actually, some much needed positivity will transform the market from the recent depressed state”, the shipbroker concluded.

Source: Hellenic Shipping News.

By | 2019-11-28T10:37:46+00:00 November 28th, 2019|News|0 Comments

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