10 June 2014

GMS weekly report on China ship breaking industry for WEEK 23 of 2014:

Finally a market sale to speak of this week in China as the AMCL owned VLCC NEW VALOR (39,721 LDT) was committed for a (comparatively) meager USD 338/LT LDT into South China.

However, the state controlled owners will benefit from the USD 150/GRT premium from the government and a subsequent USD 150/GRT discount on a corresponding new building.

The hugely enticing premium offered up by the government on Chinese flagged, state controlled tonnage has seen a plethora of units (from containers to bulkers to VLCCs) of all sizes, ages and types, head for recycling into China at below market levels this year.

The generous subsidy is set to run until 2015. However, there remain some doubts if the policy will be renewed, particularly with the aggressive fleet restructuring process the likes of COSCO, China Shipping and AMCL have undergone this year.

Source: steel guru. 10 Jun 2014

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