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Ship Breaking Industry - In Coma

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by - 11/6/2008 24708 Views

From $750 to $200 for salvaged steel, will the ship breaking industry survive?

It had been the worst affected industry by the Global economic slowdown and declining demand for steel. Asian countries like India Bangladesh were thriving with ship breaking and related business for the last decade. Obsolete ships sail their last journey towards the Asian dry-docks where it was dismantled and salvaged for scrap Iron and other electronic scrap materials. About 700 companies operate in India and Bangladesh alone where they were broken down for profits.

This was a lucrative business till the beginning of 2008 when the prices where as high as $700 for a ton of salvaged metal from the ships. It has declined steadily from there to reach $200 now. This poses serious threat to the industry as the labor costs and overheads have increased while the prices are going downhill. The worst hit state is Gujarat where in Bhavnagar, the main industry is ship breaking which is facing severe conditions now.

 

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Ship owners are not willing to sell their ageing ships as the fall in the price of scrap steel has depreciated the value of ships by almost 70%. The liquidity crunch and weak rupee have also added to their woes, Ship Breakers Association of India president Pravin Nagarsheth said. This is a major issue for the ship breaking companies. No one want to part with their aged ships for the 30% of its value compared to the peak prices. So these oldies are just gaining time floating idle on the seas.

So what happens next? Certainly the ships have to be broken down, It is better than to sink them and pollute the ocean. The governments should take action and put a restriction on mining iron ore. This may help to increase the usage of scrap steel to be recycled. I would suggest that the Government provide more tax benefits to companies which use recycled steel and to those who produce them. This will certainly give a fresh air to the business which may possibly go into a Coma.

Category : Metal

Tags : Metal Scrap,


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About Guna

C.G.Nadar works for recycleinme.com for the past 6 years and he provides support to members. He is involved in various associations of the scrap Industry and is researching the current market trends. .... more info

Comments


 
scrap prices

the sudden fall of the prices for the metal scrap has hit an all time low and many  Indian exporters are left stranded in foriegn countries with no recourse

 

will there be any revival?

 
ship for breaking

having a cargo ship idt about 4700 tons, please send to us your quotation.