by Guest » December 1, 2010, 11:05 am
Jon363 wrote:Why would Algoma waste money sending her to Turkey when they could send her to IMS with the leader?
It's not Algoma's money, they simply sell the ship to the highest bidder. The cost of the the overseas tow comes out of the scrapper's pocket, but that cost is typically offset by the cheaper labor costs and less stringent environmental regulations overseas. It also depends on where the demand is for the scrap steel. For example, steel from IMS typically ends up at the mills in Hamilton, steel from the ships Purvis cuts up at the Soo goes to Algoma. If the mills don't have the need for it, they're not going to pay top dollar for scrap, and that will be reflected in the bids the scrappers submit for the available ships. A lot of the steel from the ships cut up in Alang, India in the last few years ended up in China, but apparently that demand has slowed, and now there's a good market for scrap steel in Turkey.
[quote="Jon363"]Why would Algoma waste money sending her to Turkey when they could send her to IMS with the leader?[/quote]
It's not Algoma's money, they simply sell the ship to the highest bidder. The cost of the the overseas tow comes out of the scrapper's pocket, but that cost is typically offset by the cheaper labor costs and less stringent environmental regulations overseas. It also depends on where the demand is for the scrap steel. For example, steel from IMS typically ends up at the mills in Hamilton, steel from the ships Purvis cuts up at the Soo goes to Algoma. If the mills don't have the need for it, they're not going to pay top dollar for scrap, and that will be reflected in the bids the scrappers submit for the available ships. A lot of the steel from the ships cut up in Alang, India in the last few years ended up in China, but apparently that demand has slowed, and now there's a good market for scrap steel in Turkey.