The factors lowering the scrapping capacity due to the high import tax for scrapping vessels, the strengthened gas free regulation and the cool down of steel market caused by a current low economy status. Furthermore, future economy in India would make more fall because of the economy sanction imposed by the world principal countries against the nuclear testing. Taking these conditions affecting the ship scrapping capacity into consideration, a future capacity in India would not increase from the present capacity.
The government of Pakistan imposes 100 $/LDT on the imported scrapping ship in order to protect the products from the electric furnace. The scrapping traders are suffering from the shortage of procurement money of ships. Moreover, Pakistan would have economic sanction like India because of the current nuclear weapon test. Therefore, it is forecasted that the future capacity in Pakistan would not be increased.
Through these discussions, it could be concluded that the scrapping capacity of India and Pakistan would be falling down. China may not restart the full-scale scrapping business if an expected scrapping price become lower than 130 $/LDT, which is still lower than the price that the ship owner tend to stop selling the ship. Therefore, a world scrapping capacity by 2005 would be expected as 12 to 15 million GT, which is lower than the expected total vessel volume necessary for scrapping of around 16 million GT.
As showing this conclusion, Japanese newspaper of "Japan Maritime Affairs" dated 3 March 1998 said that a world current scrapping capacity in the early this year is getting lower and it is crucial to increase the world scrapping capacity towards 2000 to 2005.
2.4 Demand of Scrapped Material (including Price)
2.4.1 Steel Industry in Egypt
The apparent consumption of steel had been increased from 2.9 million ton in 1992 to 4.0 million ton in 1995. The crude steel production was 2.6 million ton during this period. (See Table2.4.1). The production of reinforcing steel bar was 1.8 million ton in 1995 and 2.7 million ton in 1997. The consumption of reinforcing steel bar was 2.4 million ton in 1995, 3.0 million ton in 1996 and 3.2 million ton in 1997. Approximately 0.5 million ton of steel bar was imported annually during this period to cover the gap between production and consumption. The consumption of reinforcing steel bar in Egypt is expected to grow 5% annum up to 2000, and estimated to reach 4.0 million ton in 2000.