As around 649 vessels headed to shipbreakers year to date, having exceeded 620 vessels of those sold for scrap on the same period last year, demand for newbuilding commercial ship seems to recover.
Analyst Park Mu-Hyun, E*Trade Securities of Korea said on July 17, "The number of second-hand vessel traded used to exceed those sold for scrap every year, however, 2012 appears to be different", and pointed out despite decreasing steel price, scrapping grows. Proportion of scrapped older vessels under 25 years has increased to 21% this year from 13% in 2011.
Park said demand for fuel-efficient eco-friendly vessels is rising by burdening fuel costs. And added demolition from May to August, rainy season in Southeast Asia, is slightly declining, which, however, is expected to grow back when Autumn comes.
Analyst Park revealed that 73 boxships were sold for demolition in the first six months of the year, while 51 vessels traded in S&P and in case of bulker, 266 vessels headed to scrap yards and 195 were sold in S&P market. Except tanker (67 vessels scrapped, 81 traded in S&P), these segments' demolition exceeds those traded in S&P.
In the first six months, overall demolition stood at 421 vessels, up by 33% against 316 vessels year-on-year.
Particularly, according to Park, scrapping of younger vessels is increasing, saying, "With current fleet, owners will be difficult to improve pressure over fuel costs and to hold a dominant position in the competition. Therefore, scrappings all over the segment will inevitably expand, which lead to investment in fuel-efficient vessels."