Ship scrapping rates fall short of 2012 record

Shipbreaking

Every nervous shipowner has one eye on the amount of vessels his rivals are scrapping. And there has been plenty of scrapping this year. From January to November 841 vessels equating to 41.3m dwt were recycled, according to Clarksons Research.

The latest set of scrapping figures already surpass the 38.9m dwt demolished last year. Bulk carriers have figured most prominently amongst vessels heading to an often relatively early graveyard. Some 385 bulkers or 27.7m m dwt have been scrapped year to date.

Containership scrapping has grabbed the headlines more than once this year when a handful of vessels under 10-years old were scrapped. But the amount of dead weight tonnage recycled at 7.9m dwt is a fraction of that lost in the dry bulk sector.

“By contrast, despite the softening in crude and product tanker market conditions this year, tanker scrapping has remained relatively subdued, at less than half of the five year average. However, while gas carrier scrapping remains limited in numerical terms, with just 18 ships recycled so far this year, LPG carrier demolition is on track to reach around double the five year average after earnings fell swiftly to bottom of the cycle levels,” Clarksons said.

Tanker operators are holding on to their assets longer than other sectors too, with the average age for crude tankers meeting their end at around 25 to 27 years.

“Meanwhile, car carrier scrapping has soared to 27 units of 0.14m ceu. This is already the second highest level on record, and on an annualised basis is four times above the 2011-15 average.

“In some sectors, this strong scrapping is providing a helpful brake on fleet expansion. Furthermore, with bruising market conditions having clearly taken their toll, many owners are likely to be looking to the demolition market for a little while yet,” the Clarksons report concluded.

But for those with a short memory, despite the heightened attention being paid to the breaking yards, the amount of tonnage scrapped in 2012, at 58.4m dwt, still far outstrips this year’s effort.

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