After a discussion on the prevalent inefficiency of the shipping market at the Sea Asia conference and exhibition held in Singapore (dated April 21-23 2015), a conclusion was reached to replace older and weaker vessels by breaking ships and turning idle ships, otherwise called floaters, into scrapped metal. This will be carried out keeping in mind that ship breaking is an important source of building inventory of scrapped metal.
As India needs to increase its supply of scrapped metal to support her infrastructural development programs, Indian yards are expected to demolish a large number of idle vessels this year, in contrast to the 350 which were known to be scrapped in 2014. Needless to say, this demolition of idle ships at large scale will help India reap huge benefits due to an increase in the supply of scrapped metal, which can be used for melting into steel. This will help the country meet the demand for iron and steel required by infrastructural development programs; essential to take India’s economy to a path of greater growth. To serve this purpose, ship breaking yards in Gujarat have already demolished 107 ships during the first quarter of the year, which can be regarded as good progress. This has lead to the availability of tonnes of scrapped metal from idle ships for infrastructural development purposes.
Since 2010, these ship breaking yards have come a long way, almost doubling the demolition process from 150 in 2010 to 350 in 2014. However, a lot of people in other countries are citing a higher number given the urgency of ship owners to reduce the number idle ships floating to cut costs. Not only this, ship owners have also realized that increasing the demolition of ships to produce scrapped metal and putting these floaters out of service is the right way ahead, given the drooping demand and the “on-going slide in chartering and cargo rates”.
In the past, China has usually topped the ship-breakers’ list to increase the scrapped metal capacity to help assist the infrastructure development required in the country pre-2008 Olympics period. However, since then the Chinese have paused their aggressive approach towards ship breaking and hence, production of scrapped metal, due to the fact that they now have an excessive supply of metal for purposes of development.