Norway-based bank DNB predicts that 44.0m-dwt dirty tankers will be sent for scrapping by the end of 2015.
DNB got the conclusion based on the statistics of Clarkson. The bank made in-depth analysis on the ship age, classification and scrapping value of the tankers in Clarkson database. Finally DNB finds that 44.0m-dwt dirty tankers are likely to be scrapped in consideration of their price difference between scrapping and resale value lower than $5.0m.
According to statistics from Clarkson, current global crude oil tanker fleet is about 377.2m dwt. In other words, about 12% of the dirty tanker fleet is to be sent for scrapping in the next three years.
The asset value of tankers is unlikely to see great appreciation in the following few year, which means the price difference between secondhand ship values and scrapping rates is unlikely to see any increase. However, the scrapping rate is estimated to witness declines in four years.
The maintenance cost of those tankers in special survey is usually more than $5.0m. Considering that the current poor operation conditions dirty tankers face, DNB projects that most shipowners will send the tankers to scrapping yards once the classification certificate expires.
In addition, tankers are required to equip Ballast Water Management System (BWMS) by 2016, which pushes more shipowners to scrap their vessels. The average cost to install BWMS is about $1.5-2.5m, according to an analyst from DNB.
Clarkson’s prediction is relatively conservative. According to Clarkson, about 4.0m-dwt VLCCs (50% of global dirty fleet) are to be scrapped in the next two years, occupying about 2.5% of current total. Besides, Clarkson forecasts that the scrapping percentages of different dirty tankers are to see a downturn in near future.
Nevertheless, tanker owners may intend to scrap more ships. It is estimated that the demand for dirty tanker will grow by 2.1% in 2012 while the increasing capacity will be as high as three time or more of the volume.