At the end of 2011, Mitsui O.S.K Lines (MOL) of Japan sold its four VLCCs for scrapping.
Average age of these vessels is noticeable, which only remains at 15 years (two built in 1995, one in '96 and one in '97).
It is analyzed that important trends in recent commercial ship market are represented in increasing scrapping, besides plummeted freight rate.
Shipbuilding/Shipping specialized analyst Lee Sok-Je said that ships which have reached the age of 15 years consume fuels about 30% more, on average, than newbuildings.
Therefore, the Japanese owner decided to send those ships to scrap yards due to poor fuel efficiency and oil price prospected to remain high.
He saw that MOL made a bold decision after careful consideration that fuel efficiency is far more important than freight rates in making profit.
The second trend is related to ballast water treatment system (BWTS). In case of VLCC, it costs overall $5-8m to install it. He said, MOL seems to have examined that placing newbuildings are more beneficial than equip BWTS to old vessels.
In conclusion, Lee emphasized these current trends are prompting shipowners to replace old vessels with new ones.