As scrappings for small-and-medium vessels getting larger by high oil price, South Korea's small-and-medium shipyards, including Hyundai Mipo Dockyard, STX Offshore & Shipbuilding, SPP Shipbuilding, Sungdong Shipbuilding & Marine Engineering, etc., are expected to rebound.
Clarksons forecast that 2012's scrapping would reach 51.1m dwt, exceeding the highest record of 41.4m dwt from last year.
Market player explained, "As bunker c oil price reached $700, bulkers reduced speed to consume less fuel and those are not fuel efficient go to scrapping yards."
IMO's regulation on green gas emission to be applied next year will also boost scrapping activity.
An official from Hyundai Mipo said, "As scrappings of small-and-medium size vessels increase, replacement demand grows accordingly. Moreover, since owners consider newbuilding price hit bottom, newbuilding market would be hotting up in the second half this year."
Market player said, "Owners in the Middle East tend to demand fuel-efficient vessels, in spite of high pricing."