Atlas to export scrap from ship recycling in Scotland

An affiliated company of UK-based trading firm Atlas Commodities has signed a contract to lease a dry dock in Scotland to export high-quality ferrous scrap generated from the decommissioning of large shipping vessels, with first shipments targeted for March next year.

Atlas Decommissioning has taken on the long-term lease of the Inchgreen Dry Dock and adjacent land in Inverclyde on Scotland's west coast. The deal will create around 100 jobs in the area.

Atlas Commodities CEO Harry Seale, who is one of Atlas Decommissioning's four founding shareholders, told Argus that the company initially aims to export 200,000t of bonus-grade ferrous scrap from Inchgreen in its first year of operations.

This scrap will predominantly be sourced by the decommissioning of six large vessels each year, each of which will generate 30,000-35,000t of scrap. Atlas Decommissioning has contracts in place with major container lines for multiple vessels that they are removing from their current trading fleet, and the new operation will have the capability to handle Panamax-sized vessels and potentially even larger. Decommissioning of the first vessel under the new contract is scheduled to begin in December.

Atlas intends to ship large deep-sea bulk cargoes of ferrous scrap from the port and aims to dispatch its first cargo in March 2022. This will be Atlas' first entry into deep-sea scrap exports after rapidly scaling up trading operations in the container and short-sea export markets and UK domestic markets over the past several years.

Seale said Atlas is currently trading around 80,000 t/month of ferrous scrap and that the Inchgreen dock will take its overall trading tonnage above 1mn t/yr.

Over time, Atlas intends to augment its export capacity at Inchgreen with scrap collected from the surrounding region, but the first phase of operations will be mainly sourced from scrap generated from ship-breaking.

Appetite for bonus-grade in Turkey, the largest buyer of UK ferrous scrap, has strengthened over the past year. The Argus daily assessment for the premium held by bonus over HMS 1/2 80:20 is currently $20/t, double the traditional $10/t that was in place before 2021.

By Ronan Murphy