Ship Scrapping Information

(Originally Created August 2010)
(Finally Updated and Published October 2017)

Reference:
Datapoints, tables, and various information are from RAND Monograph Report MR-1377:
Disposal Options for Ships by Ron Hess, Denis Rushworth, Michael V. Hynes, and John E. Peters, written in 2001.

Multiply costs by 1.39 to account for inflation between 2001 and 2017.

Ships Scrapped/Lost Annually Per Year

About 150 to 300 ships are lost each year at sea. Most of them are fishing boats averaging 2,500 GRT / 1,000 LSW. Another 600 to 1,100 ships are scrapped each year; with an average size of 13,000 GRT / 5,100 LSW each. The average lifetime of a merchant ship is about 25 years; as beyond that point they cannot be maintained economically in service. There are exceptions, such as ships on the Great Lakes, which not being subject to the corrosion of saltwater, can last a bit longer.

Hazardous Wastes on Ships

In a study by Metallurgical & Engineering Consultants Ltd of India, it was found that the average merchant ship has between 250 and 800 kg of PCBs in paint; 20 to 30 kg of lead, and 4,000 to 5,000 kg of asbestos insulation.

Ship Corrosion

For merchant ships, losses of metal to corrosion can approach 10% of LSW or higher. This is due to a larger surface area being exposed to weather and poorer maintenance standards than U.S. Navy warships. Also, during the last five years of service, maintenance is generally deferred, since the ship will be scrapped “soon”.

Towing Costs

Before a ship can be scrapped; it must be towed from a reserve yard or its last port of call to the scrapyard.

Average towing costs per tow mile are $224; so a 800 mile tow costs $179,200.

On top of this is the cost to rig the ship for tow; which is from $100,000 for a destroyer to $275,000 for a battleship or escort carrier.

Scrapping Costs

United States:

Puget Sound Naval Shipyard estimated that a 5,500 ton LSW vessel would require 26,426 man-days to scrap. With a hourly labor rate of $45 per hour (Labor rates in the US vary between $34 and $56); a eight-hour man-day costs $360. This comes out to $9,513,360 in labor costs. By contrast, PSNS estimated that the other costs involved in scrapping such as consumables and HAZMAT disposal to be only $610,385. This means 94% of the cost in breaking the ship is tied up in labor.

India:

The average ship recycling project in India spends about 750 rupees ($16.67 USD) per ton in labor (cutters, crane operators, and supervisors) to dismantle the ship; and pays about 400 rupees per ton ($9 USD) for cutting torch fuel. So this means that 65% of the cost involved in physically breaking the ship is tied up in labor.
Indian scrappers earn between Rs100 and Rs150 a day for a ten hour day, six days a week; which is about equivalent to $2 - $3 per day in the US.
Indian yards oscillate between 7 and 12 fatal accidents (in which one or more people are killed) per 10,000 workers. This compares with the typical fatal accident rate of 5 to 7 accidents per 10,000 workers in other Indian heavy industries.

Scrapping Man-Hour Cost Estimation:

RAND did some nice work and came up with the following equations:

Man-Hours Required Per Ton in Indian Scrapyards:

MH/ton = 42.8 x LSW0.2552

Cost Per Ton to Scrap via Indian Data Normalized to PSNS/SDP Costs:

$/LSW-ton = 11,107 x LSW0.2552

They also managed to obtain complexity factors for ship construction from NAVSEA, as shown below:

NAVSEA Ship Complexity Factor

Ship Type

New Construction
(man-hours/ton)

Complexity
Factor

Surface combatant

600

1

Aircraft carrier

460

0.8

Amphibious warfare

400

0.7

Auxiliary

150

0.3

Merchant

--

0.2

SOURCE: NAVSEA 017, Cost Engineering and Industrial Analysis Division.

You can apply the above equations with the complexity factor as follows:

$/LSW-ton × CF × LSW = Total Cost

Thus, a 80,000 ton (Light weight) Aircraft Carrier's scrap cost would be $623 × 0.8 × 80,000 = $39,872,000.

Miscellaneous Data

Average Recoverable Value of Ships in Domestic Recycling

Material

Weighted Avg. $/Ton

Navy Ships

Merchant and Other Ships

Steel

44

48

Aluminum

11

0

Copper and copper alloys

16

10

Lead

8

0

Total scrap metal

79

58

Equipment

9

6

Total

88

64

Types and Amounts of Materials Recovered by Alang Ship Recycling
(in percentage of LSW)

Type of Vessel

Reroll Plate

Melting Scrap

Cast Iron

Nonferrous Metals

Machinery

Wood and Misc.

Weight Lost

General cargo

56-70

10

2-5

1

4-8

5

9-15

Bulk carrier

61-71

8-10

2-3

1

2-5

1-5

10-16

Ore carrier

62-69

10

3

1

3-5

5

10-16

Passenger

44-58

10

5

1-2

10-15

5-7

11-17

Oil tanker

72-81

5-7

2-3

1-2

1-2

1-2

10-12

Ore bulk oil carrier

66-75

8-10

3

1

1-6

1-2

10-13

Naval ship

53-67

10

2-6

1-2

4-6

1-2

15-22

Container ship

63-67

10

3-4

1

5

5

10-13

Fishing/trawler or factory

47-67

10

3-8

1-2

2-10

5

12-18