Sources said on May 6, more and more small-and-medium size ships go into scrapping yard amid soaring oil price.
Clarksons forecast that 2012's scrapping would reach 49.1m dwt, exceeding the highest record of 41.2m dwt from last year. Particularly, vessels that are below the average life expectancy are sold for scrap, due to high fuel consumption.
For instance, Mitsui O.S.K. Lines of Japan sold five tankers for demolition in January this year, under the age of 20 years, since its lack of fuel efficiency.
IMO's regulation on green gas emission to be applied next year will also boost scrapping activity.
An official from Hyundai Mipo Dockyard of South Korea said, "As scrappings of small-and-medium size vessels increase, replacement demand grows accordingly. Therefore, newbuilding market for small-and-medium ships will bounce back."
Market player said, "Soon demolition of large vessels would come as well."