The Messy, Booming Business of Recycling Cruise Ships

Today the Fantasy is attracting a whole different breed of booty-seeker. In July, the 30-year-old ship sailed to the Aegean Sea, wrapping its final voyage in the shipbreaking capital of Aliaga, Turkey.

Its resting place there is a demolition yard where old cargo ships, tankers, research vessels—and now cruise ships retired during the Covid-19 pandemic—get torn apart and broken into pieces. In this case, they’re not being broken in half to get upgraded and stitched back together. Instead, circling the Fantasy’s partially deconstructed innards are buyers from all sorts of industries, looking for rock bottom deals on everything from artwork and kitchenwares to electrical wires and stainless-steel sinks.

For the cruise company, it’s an opportunity to recoup at least some value from an asset that’s currently acting as dead weight; while ships’ values decline with age, the Fantasy was originally built for about $225 million. And for the recycling companies that buy the vessel for cash and take on the hazardous task of emptying all its valuables, it’s a matter of a months-long salvage resale on steroids.

It’s hard to gauge how exactly much money is made off of cruise ship recycling. Companies don’t immediately disclose the sale prices of the vessels after relinquishing ownership, and the resale value of their most sought-after commodity, scrap steel, fluctuates in each global market on a daily basis.

But the business is booming.

Next to Carnival Fantasy in Aliaga are two other Fantasy-class ships built in the late 1990s. And next to them are two former Royal Caribbean vessels (scrapped by Royal’s Spanish partner line Pullmantur Cruceros). The ships all had big fan bases, even as they aged. Fantasy and its sister ships started 2020 full of passengers bent on fun-in-the-sun activities in the Caribbean, Bahamas, and Mexican Riviera.

The ships would have left the fleet in coming years even in a healthy industry; the pandemic sped up the process, with owners of idled vessels hemorrhaging cash and looking to cut their losses.

In its third quarter filing, Carnival Corporation said it planned to sell 18 “less efficient” ships in 2020, resulting in a 12% reduction of its nine-brand fleet. “Those ships were giving us a bad drain,” Carnival CEO Arnold Donald said during a recent webinar with the Society of American Travel Writers.

Without much of a market for second-hand tonnage, the main worth of the ships is the steel that makes up the superstructure.

If, for instance, Carnival Fantasy has 15,000 tons of steel in its superstructure, the scrap may sell for upwards of $4.7 million based on current global market prices—though other factors also come into play, such as local prices and demand.

Along with the risk of these market fluctuations, the buyer also takes on the uncertainty of just how much metal can be salvaged. Pre-1990s ships tend to have more steel in their hulls and underwater plating, but those built in the ’90s and after can bear lighter and stronger alloys.

Either way, steel and metal scraps will travel to a smelter to make rebar for construction projects around the world. Steel from some other dismantled ships can find its way to Turkey’s large car manufacturing industry, where it might become parts for a Toyota or a Ford.

Aluminum, copper, and stainless steel are also salvaged and resold, along with other valuable commodities that mostly remain in Turkey. The ripped out teak decks on Fantasy may end up in local shops, restaurants, and homes. Theater scenery and lighting may find its way into show productions. Even the tackiest artwork has some value, and can end up in restaurants throughout the country.

Buyers come to the yard for everything down to the bolts and nuts. Even if a used toilet sells for a fraction of the shelf price, multiply that amount by a few thousand—given the number of cabins and public spaces on each ship—and it can add up to a substantial sum.

According to Orbay Simsek, vice president of the Aliaga-based Simsekler Ship Recycling Company, there are even markets for kitchenware, closets, and blankets.

Basically anything and everything that can be sold, sells. Everything must go. Even the sarcophagus.

Taking apart ships is a controversial topic, thanks to concerns over both human and environmental risks. It’s one of the most dangerous jobs in the world, according to Wouter Rozenveld, director of Sea2Cradle (SC2), an expert in green ship recycling who was hired by Carnival to oversee the safe dismantling of its ships. Each Carnival vessel may take up to nine months to break down, he says, and the blowtorch-based work comes with constant fire hazards.

gCaptain