Dismal shipping markets are driving owners to choose to sell their old tonnage for scrap.
Appalling freight markets have pushed owners into dispatching a massive volume of tonnage for demolition during the first two months of 2012.
Prices may have softened but overall they remain remarkably resilient given the amount of ships flooding into the market.
“What an absolutely fantastic start to the year” is how Ed McIlvaney of EBM Shipbroking sums up the first two months of 2012. In that period some 170 vessels of 9.095 million dwt (1.863 million ldt) went for recycling, according to EBM’s statistics.
By far the biggest sector was dry-cargo/miscellaneous vessels, which totalled 133 of 5.84 million dwt (1.32 million ldt).
Tankers and combination carriers (OBOs) amounted to 37 of 3.25 million dwt (542,927 ldt).
If the monthly average so far of slightly over 4.5 million dwt continues throughout 2012, the year would end with a massive 54.57 million dwt of tonnage going to the torch. This would far exceed last year’s total, which McIlvaney put at 978 sales of 38.88 million dwt, with 72 capesize and 71 panamax bulkers leading the way.
As a comparison, in January and February 2011, according to EBM, some 105 vessels of 4.92 million dwt (992,644 ldt) were sold for demolition — an average of less than 2.5 million dwt per month. This comprised 82 dry-cargo/miscellaneous vessels of 3.14 million dwt (682,039 ldt) and 23 tankers/combination carriers (OBOs) of 1.776 million dwt (310,605 ldt).
The dash for scrap in 2012 could beat what broker Braemar Seacope says was the third biggest ever for demolition last year — 41 million dwt, according to its figures. The record to overhaul is the 44 million dwt set in 1985, according to Braemar Seascope (42.5 million dwt, says EBM).