Plunging Scrap Steel Prices Hit Ship Recycling Revenues
The Chinese ship recyclers are feeling the heat as falling scrap steel prices have eaten into their revenues during the past one year, says a report in China Daily.
The increasing costs of adopting "greener" vessel-breaking method also adds to the woes, says China National Ship-recycling Association.
The latest figures show ship-recycling revenue dropped 15 percent to 3.4 billion yuan ($519 million) in China last year.
According to senior industry officials, the Chinese ship recycling sector was badly impacted by the continued weakness in steel scrap prices.
The huge drop in demand from major sectors including automobiles and manufacturing industry resulted in sharp drop in steel scrap prices to anywhere between 900 yuan and 1,000 yuan in 2015. This has squeezed the profit margins of many companies.
The cost of operation has surged higher on account of measures taken by them to implement “greener” vessel-breaking methods, as directed by the Chinese authorities.
China’s ship-recycling yards are mainly located in Zhejiang, Jiangsu, Shandong and Guangdong provinces, collectively employing around 120,000 workers, and jobs are now also under threat.