The Chinese market has been dominated by the government subsidies, which have granted state owners a USD 150/GRT premium on Chinese flagged vessels scrapped within China and a USD 150/GRT discount on the corresponding new-building.
The scheme has been widely criticized for not rebalancing the global fleet (for every vessel scrapped one has been added), but it has stimulated domestic growth and activity in domestic shipbuilding and ship recycling yards alike.
The main beneficiaries have been the largest state companies such as COSCO and China Shipping, although many private owners have still opted to bring their vessels across to the sub-continent where a USD 200/LDT premium has been available for much of the year.
The scheme is expected to run until the end of 2015, so it will be another quieter year ahead on international tonnage into Chinese ship recycling yards.
Source: steel guru. 31 December 2014