Beijing: Despite shipping and shipbuilding showing fragile signs of recovery in China the local ship recycling business is still in crisis with many yards facing bankruptcy in the coming 12 months, according to the president of the China National Ship Recycling Association, Xie Dehua.
“Many of China’s ship recycling yards will go bankrupt next year,” Xie says.
China’s yards tend to be slower and more expensive when it comes to scrapping, a result of the fact that ships heading for recycling in the People’s Republic are not beached like elsewhere, but are dismantled in dock.
Beijing introduced a ship scrapping subsidy at the start of the year, and Xie hopes that will see more domestic owners scrap at home. Xie is irked that many Chinese owners are still scrapping overseas as China has an urgent need for scrapped steel.
China’s scrap steel price is very low at present which adds to the woes of the ship recyclers. Their ability to beat their Indian Sub-Continent rivals on price is next to impossible.
“Our top priority is still to develop green ship recycling even though this is not good for business at the moment, but it is very much the future of the industry,” Xie maintained. [23/10/14]