Scrap boom at Alang may further dent steel prices

A boom in ship breaking activity at Alang, the country's largest ship-breaking yard, has brought down scrap prices and man dent finished steel prices as well, reports said.

With hundreds of  tonnes of scrap steel from the yard hitting the market, prices of scrap steel have already halved to Rs16,500-17,000 a tonne from Rs34,000 a tonne a year ago, reports said.

Alang yard, which saw a boom in new arrivals of ships amidst a decline in trade and freight rates, currently despatches 1,600 to 6,500 tonnes of scrap steel daily.

Reports said as many as 125 vessels from all over the world are lined up at Alang ship breaking yards, against just 40 vessels in the whole of 2008.

Alang Ship Breaking Industry Association expects recovery of steel scrap this year to double to about 12 million tonnes. Breaking charges too have fallen to $250 to $300 a tonne from $600 a tonne in 2008. However, realisations will drop as scrap steel prices have halved.

With over 600 ships weighing 10,000 tonnes to 30,000 tonnes available for breaking all over the world, scrap trade is having a boom time now.  Prices, however, are a cause of concern.

A delegation from the International Maritime Organisation (IMO), which visited Alang, Asia's largest ship breaking yard, on Wednesday, is said to have expressed satisfaction regarding the steps taken on safety of environment.