Ship owners are a worried a lot today as a depressed freight
market has been taking a toll on their earnings for the last almost two years
now. But players at the other end of the business – ship breaking – are
increasingly cashing in on the shipping industry downturn.
The global slowdown in trade & reduction in freight
rates makes it a boom time for ship breakers, especially when prices of steel
scrap are moving up, as it is happening at present.
“Increasing global shipping capacities against a backdrop of
weakening in economy will lead to a surge in ship breaking activity in the next
couple of years. India's ship breakers will acquire a larger market share
globally, supported by favorable demand for steel scrap and limited competition
from neighboring markets,†a report by CRISIL says.
Crisil estimates that of the 180 million GT of global
shipping capacities over 20 years old, about 55 million GT will come to the
breaking yards in the next two years.
The global market share of India's ship breaking industry,
located at Alang in Gujarat, is expected to grow to 40-45 per cent in the next
two years, from 35 per cent in 2010.
Legal restrictions on ship breaking in Bangladesh and
China's higher ship breaking costs are expected to help Indian players.
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