The "steel beaches" of Southwest Asia

The Arts Mechanical has a very interesting article on shipbreaking on the beaches of Bangladesh, Pakistan and other Southwest Asian nations.  Here's an excerpt.

The fact is that once a ship reaches about 25 years of age it goes from being an asset to a problem.  A steel ship rusts and the metal fatigues. the engines wear out and parts for 25 year old machinery get harder to find and more expensive.   The shipping market changes and older vessels may not fit into the new market picture.

. . .

When any vessel get old things go wrong and seams or welds can fail. So when a ship reaches it’s end of life it needs to be disposed of.

The most common way in recent years is to sell it to a ship broker who turns around and sells it wherever they can, for cash, which the debt laden shipping companies  desperately need.

The companies along the beaches then buy the ships at $350 to 400 or so a ton and beach them to cut them up, getting $500 to 600 a ton for the steel.

. . .

The business apparently started when a ship ran aground off Chitagong back in the 1960’s. It would not surprise me if the owners of the various breaking yards, the bankers that fund them and brokers that supply them are not all related to each other one way or another.  That would provide at least some stability in a very unstable market.  I’m not sure what entrepreneurial inspiration to actually buy and strand ships deliberately. but it was one of the biggest economic opportunities in Bangladesh’s history.  The entire Southwest Asia shipbreaking industry and all the industries that rely on the steel the shipbreaking imports are the result of exploiting the opportunity.

The reason that the beach breakers do so well is that ship breaking is a very volatile market with a bunch of different inputs.  There’s not enough stability to justify the kinds of capital investments that work so well in developed countries.  And ship breaking has always been labor intensive  for that reason. So breaking has always happened where cheap labor is near at hand and there are very few places better than that in Muslim Southwest Asia. So the beaches of steel were almost inevitable. They simply could operate at lower cost and bid higher for the ships than the other potential markets.

There's much more at the link, including many links to other articles, as well as video clips and reports that make interesting viewing.  Here's just one of them, to whet your appetite.  It describes the extraordinarily dangerous working conditions for laborers in the ship scrapyards.

Click over to The Arts Mechanical to watch many more videos, long and short, about this subject.  I found it fascinating.

Peter