Shipowners are likely to increase the scrapping for older double-hull VLCCs, Clarksons Capital Markets says.
Only one double-hulled VLCC has been sent for demolition in the past two years but the option is becoming “more desirable”, says analyst Michael Pak.
He notes bunker prices, which are up by one third this year, and the introduction of new ballast water regulations may sway owners to take action given the oversupplied market.
In his weekly report the analyst says a 15-year-old VLCC is worth $23m in the second hand market and would fetch $19m if scrapped.
He explained: “As the over-supply of VLCCs (estimated at 50+) continues, absent a demand spike and/or floating storage, we believe that only scrapping and order cancellations will bring the market back into balance.”