- Falling demand for tankers has led more owners to consider the recycling option, especially as scrap steel prices increase.
- The surge in scrapping prices has been fuelled by the ever growing rise in steel price and demand.
- A demand catalysed by lockdown restrictions causing logistical issues for construction sites across the world.
The first half of 2021 saw 275 vessels sold for scrap, up 40% and 33% compared to 2020 and 2019, respectively, but nearly half of those scrapped were tankers, reports Maritime Media.
Half vessels scrapped in 2021 were tankers
A total of 275 ships were sold for scrap in the first half 2021 with the tanker sector leading the charge, according to a half-year demolition review by UK-based VesselsValue.
The number represents a 40% and 33% increase compared to 2020 and 2019, respectively.
The 275 scrapped vessels have a combined deadweight of 11.9 million tonnes and a total scrap value of over $1 billion, VesselValue said. A total of 131 tankers were scrapped, accounting for nearly half of all ships scrapped in H1 2021.
“The increasing scrapping numbers are a direct result of exceptionally high scrapping rates, which rose and continue to rise throughout 2021,” VesselsValue said.
“The end of H1 2021 saw Container scrapping prices reach 600 USD/LT, levels not seen for nearly 13 years. The surge in scrapping prices has been fuelled by the ever growing rise in steel price and demand. A demand catalysed by lockdown restrictions causing logistical issues for construction sites across the world.”
Bulker & container sectors “turn back”
Unsurprisingly, the bulker and container sectors “turned their back” on the demolition market, despite the lucrative prices, amid higher charter rates and a robust S&P market.
“Tanker owners, however, were more tempted by the high scrapping prices, but still, the majority are choosing to cling onto older assets in the hope of a full market recovery,” VesselsValue said.
In the offshore sector, financial pressures due to Covid-19 had owners scrapping non-core assets, including some as part of pre-packaged Chapter 11 bankruptcy agreements.
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Source: Riviera Maritime Media
