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News ID: 80041 |
Publish Date: 12:31 - 22 May 2018

Chinese scrapyards raise prices to attract foreign ships

In an attempt to attract tonnage from foreign shipowners before such imports are banned from 1 January 2019, Chinese ship-recycling facilities have raised their prices to match those offered by Turkish yards

According to Athenian Shipbrokers, Chinese scrap prices averaged USD210/ldt for bulk carriers and USD230/ldt for tankers in the week ended 20 April, before the Chinese government announced that from 1 January 2019,ships can no longer be imported for demolition. Beijing’s decision means that only locally owned vessels may be recycled in China, reported by MANA correspondent.
The government’s explanation is that it wants to reduce the pollution caused by scrapyards.
Chinese scrap ship prices have since firmed, averaging USD255/ldt for bulk carriers and USD270/ldt for tankers as of 11 May.
This compares with prices of USD275/ldt for bulk carriers and USD285/ldt for tankers in Turkey.
However, China’s price levels remain behind those on the Indian subcontinent, where prices exceed USD400/ldt because demand for scrap steel is higher. As such, cash buyers told Fairplay that the majority of shipowners will prefer to send their vessels to the Indian subcontinent.
IHS Markit’s data show that year to date, only three foreign-flagged vessels have been scrapped in China.
These were Grieg Green’s 1998-built container ship Al Rain, United Arab Shipping Company’s 1998-built container ship Sabya, and Nagai Kaiun Kaisha’s 1995-built molten-sulphur tanker Koa Maru.
A cash buyer source said, “Owners who choose to scrap ships in China do so either because the last voyage of the vessel ended in East Asia, making it more economical to sail to China for recycling, due to the bunker costs, or because they are particular about having the ships demolished in specialised yards.”
For the whole of 2017, 170 ships were broken up in China, far fewer than the 566 ships recycled on the Indian subcontinent.
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