About 80 per cent of the total 32 ship-breaking units at Sitakunda has become inoperative while the others are now engaged in breaking vessels imported long before.

The crisis in ship-breaking industry also hit the re-rolling mills, which mainly use raw materials from the scrapped ships to manufacture rods and corrugated sheets.

The price of old ships has gone up by over 50 per cent in the last two months, sources in the ship-breaking industry said. Now these ships are sold at over 300 US dollars per ton, which was below 200 dollars two months ago.

"We cannot compete in the international market for this unusual price hike," said Kabir Khan, secretary of Bangladesh Ship Breakers Association (BSBA). "Moreover, import duty on scrap ships is also high," he added.

Khan said only three small ships have been imported for scrapping after the price increase. "Usually, on average ten vessels are brought from abroad per month. But now our ship breakers are losing interest to import old ships."

Anam Chowdhury, a beaching captain engaged by ship-breakers at Sitakunda said, "Now I don't find ships for beaching in the yards most of which remain idle."

"With the suspension of ship breaking works, huge workforce in this highly labour intensive industry fell unemployed," he added.

The ship-breaking industry employs about three lakh labourers in 32 units on the Sitakunda coast. About 10 lakh people directly or indirectly depend on this sector, association sources said.

Several hundred shops sprung up around the ship breaking yards to sell goods and accessories, including generators, toiletries, furniture and cables, collected from the scrapped ships.

Industry sources said with the rise in freight charges across the globe most of the shipping companies are now pressing their old vessels into the commercial operation after repairing them instead of selling them.

As a result, there has been a shortage of scrap vessels in the global markets, said Captain Habibur Rahman, a nautical surveyor of Mercantile Marine Department

Old vessels, especially oil tankers, are usually imported from different ports in the Gulf and Singapore.

Meanwhile, about 70 per cent of the re-rolling mills using raw materials from the ship-breaking industries, have been forced to suspend operation due to lack of scraps.

"Thousands of our workers are now unemployed while the development works are also being disrupted," said Abu Bakar, vice president of Re-rolling Mills Association.

Ship-breaking units supply about one million tons of scraps annually and the government earns Tk 600 crore revenue from this sector, association sources said.