Indian shiprecyclers are being forced to close or reduce their operations due to a lack of oxygen supply during the coronavirus pandemic.
The country now has the second highest number of Covid-19 patients in the world after reporting record jumps in daily infections recently.
Late last week, the Gujarat state government has ordered oxygen producers to maximise supply to hospitals to save patients in intensive care units.
This has come at the expense of industrial users like ship breakers and steel plants.
In an alert, cash buyer Best Oasis estimated that 30% of the Alang-based yards have cut their operations in half due to oxygen shortage.
The remaining players are expected to be shuttered within the next three days for the same reason.
“This indeed is a big worry for shiprecyclers. Coming times look difficult from the present day,” Best Oasis said.
The country’s scrapyards had enjoyed an unusually busy monsoon season partly due to increasing demand for green recycling.
Data from Best Oasis Best showed they acquired about 774,000 ldt of vessels between June and August, up 94% from 398,000 ldt in the same period of 2019.
Market players said most of the ships ended up with scrapyards certified under the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships.
Of the world’s main shipbreaking nations in South Asia, India remains the only one that has ratified the International Maritime Organization treaty.
The country has about 70 certified recycling facilities, compared with one in Bangladesh and none in Pakistan.
“Oxygen supplies are being diverted to hospitals and not ship recycling yards, and this is seeing a slowdown in local ship cutting [in India] for the time being,” said Jamie Dalzell, a senior trader with cash buyer GMS.
“Rates in Bangladesh and Pakistan are currently higher than India, so these two markets will continue to secure the majority of the market for non green tonnage.”
