Fall in scrap price hits India's breakers
SHARP declines in scrap steel price have depressed India's shipbreaking sector, with almost all shipbreaking companies reportedly facing losses on their stocks.
Scrap steel prices have dropped about 65% to $200 per tonne, from $750/tonne in the past two months, the Times of India reported yesterday.
Shipowners are reluctant to sell their ageing ships as the fall in the prices of scrap steel have depreciated the value of ships by almost 70%.
Also, by selling scrap, just 30% of ship value is recovered. The liquidity crunch and the weak rupee have also added to woes, said shipbreakers’ association president Pravin Nagar Sheth.
Banks are hesitant to issue letters of credit to shipbreakers, and foreign banks have almost stopped issuing such documents, he told the newspaper.