Seatrade Global – CSDC, CSCL get subsidies worth $41.5m for ship scrapping

(Written by Lee Hong Liang)

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30 September 2014 - China Shipping Development Co (CSDC) and China Shipping Container Lines (CSCL) have revealed that the government subsidies they received worth a combined $41.5m from ship scrapping activities will have a positive effect on their bottomline in financial year 2014.

Bulker and tanker owner CSDC announced to the Shanghai Stock Exchange that it has received subsidies of RMB215m ($35m) by sending 15 elderly vessels to the shipbreakers between 1 January 2013 to 30 April 2014.

Container line CSCL also announced that it has gotten RMB40m in subsidies by demolishing five elderly vessels between 1 January 2013 to 30 April 2014.

Both CSDC and CSCL have claimed that the subsidies would have a “positive impact on the 2014 financial results”.

CSDC and CSCL are both subsidiaries of China Shipping Group.

China’s ministry of transport had announced in December 2013 a policy that will offer subsidies of RMB1,500 per gross tonne to shipping companies that scrap their vessels before their operational expiry dates.

China dismantled around 2.5m tonnes in capacity of vessels in 2013, up 4.6% from the previous year, according to China National Shiprecycling Association.