THE demolition industry in China will not be viable if prices fall below US$150 per light displacement tonne (ldt), the weight of the steel of the ship, says Wah Kwong president Frank Chao.
He said he would like to see the price paid for scrapping vessels remain below $140 ldt for the industry to be provide suitable returns for scrappers.
Speaking at the Intertanko annual meeting last week, Mr Chao said there also should be better co-ordination between Chinese scrapyards, the construction industry and other downstream businesses which deal with ship breakers.
According to a Japanese scrapping study also presented at the Intertanko meeting, a faster pace of tanker demolition may depend on better credit facilities for ship breakers to buy older tonnage.
The paper, which was jointly presented by the Japanese Shipowners Association and the Shipbuilders' Association of Japan, suggests that some form of assistance be provided to resolve the problems faced by scrapping firms in purchasing vessels and also problems faced by countries in expanding their scrapping capacity.
The joint committee for ship-breaking promotion, which was set up by both associations in April last year, said it was keen to cultivate an understanding of the importance of accelerating ship breaking through collaborating with international organisations such as Intertanko and Intercargo.
The joint committee has proposed the provision of technical assistance and information in response to requests from parties engaged in ship scrapping.