Posted on 29 Jul 2022
Vietnam's Ministry of Transport (MoT) has given approval for another shipbuilder to enter the country's tightly restricted ship-demolition sector, Mysteel Global has learned, but the extent to which the move might give a boost to domestic supplies of ferrous scrap remains unclear.
The company granted MoT permission is Nosco Shipyard Joint Stock Company, a shipbuilder located in Quang Yen in north-east Vietnam's Quang Ninh Province, about 35 kms from the country's maritime hub of Haiphong. Established in 2009, Nosco Shipyard hosts several drydocks and can build vessels to 75,000 deadweight tons.
Local reports quote the MoT directive as saying permission has been granted for Nosco to demolish dry cargo ships, container ships, ore carriers and liquid cargo ships such as oil tankers, plus ferries and barges, with the total tonnage limit being 70,000 DWT for unloaded vessels with a draft of 5 metres.
The announcement is significant because in 2015 the central government in Hanoi revised its Law on Environmental Protection to ensure that the expansion of Vietnam's shipbreaking industry was not achieved at the expense of the environment.
Most of the country's approved shipbreaking enterprises are located in and around Haiphong, a massive port located just 30 kms south of the UNESCO Heritage Site of Halong Bay, the country's most famous tourist attraction.
"Importers of ships for demolition in Vietnam will be required to prepare an application package that includes an environmental protection dossier," Vietnam News Service reported at the time.
"The dossier includes a declaration of the actual state of the ship, a written commitment to abide by environmental standards and a copy of the shipyard's certificate of satisfaction of environmental protection conditions," it said.
Data on the number of vessels Vietnam scraps annually is unavailable, but of the 600-700 ships broken annually, India, Bangladesh and Pakistan account for the vast majority, with Turkey, the European Union and China runners up, Mysteel Global notes.
If the MoT's approval for Nosco to begin ship demolition represents the start of a new push by Hanoi to expand shipbreaking in the country and so beef up the availability of steel scrap domestically, present exporters of scrap to the country such as the Japanese may be concerned about the impact this might have on their business.
During 2021, Japan exported about 2,25 million tonnes of ordinary ferrous scrap to Vietnam, as Mysteel Global reported. Though this was down by a huge 34% from 2020, Vietnam still accounted for over 30% of Japan's scrap exports and was the second-largest export destination after South Korea.
Source:Mysteel Global
