As a thumb rule, the cost of breaking a ship comes to Rs 1,000 a tonne. And these scraps are being sold in the market at an average price of Rs 20,000-22,000 a tonne, giving ship-breakers a minimum margin of above 40 per cent. Till two months ago, these ships were bought at $750 a tonne and scraps were being sold at Rs 30,000 a tonne. The scrapping process takes about six months and the rupee has depreciated by about 25 per cent in that period. Besides, scrap prices have come down by 27 per cent in the last two-three months, giving ship-breakers a tough time on purchase of old ships. However, the fall in prices of old ships have changed the scenario. The Ship Breakers Association of India, an industry body, is expecting a three-fold jump in the total weight of ships to be broken in FY09 from previous year’s half a million tonnes.
Ship-breakers eye better profit margins
As a thumb rule, the cost of breaking a ship comes to Rs 1,000 a tonne. And these scraps are being sold in the market at an average price of Rs 20,000-22,000 a tonne, giving ship-breakers a minimum margin of above 40 per cent. Till two months ago, these ships were bought at $750 a tonne and scraps were being sold at Rs 30,000 a tonne. The scrapping process takes about six months and the rupee has depreciated by about 25 per cent in that period. Besides, scrap prices have come down by 27 per cent in the last two-three months, giving ship-breakers a tough time on purchase of old ships. However, the fall in prices of old ships have changed the scenario. The Ship Breakers Association of India, an industry body, is expecting a three-fold jump in the total weight of ships to be broken in FY09 from previous year’s half a million tonnes.