In July, overall 78 vessels of a cumulative 3.9m dwt were sent to recycling yards and the benchmark price for a VLCC scrapped in the Indian sub-continent increased from 380$/ldt to 410$/ldt during the same month.
In a report by Clarkson Research, the total amount sent for scrapping in the year-to-date stood at 720 vessels of a combined 33.7m dwt (20.2m gt) and on a yearly basis, demolition in 2012 is expected to record 55.2m dwt (33.1m gt).
From January to July of the year, 19.6m dwt of bulkers had been scrapped, representing 34% increase year-on-year and 8.6m dwt tankers, 34% more than the same period of last year, were sent for demolition.
2012 will see 31% more volumes to be scrapped than 42.1m dwt (25.3m gt) recycled in 2011 and in 2013, overall 44.5m dwt (26.8m gt) is expected to be sold for scrap.
Demolition volumes remained at 4.2m gt in 2007 on the base of flourishing market, which doubled to 9.5m gt in 2008 when global financial crisis occurred. They then grew to 25.5m gt in 2009 and 19m gt in 2010. This uptrend in demolition is to continue for the next few years.
Pakistani scrapping yard purchased a suezmax tanker (built in 1992) in 440$/ldt, totalling $10.71m, while a handysize bulker (1981) was sold for scrap at Bangladeshi yard in 375$/ldt, $2.89m in total.
According to China Water Transport, in July, a total of 4.1m dwt were sent to recycling yards - 1.1m dwt to China, 0.6m dwt to India, 1.1m dwt to Bangladesh and 1.3m to Pakistan.
Meanwhile, Clarkson reported that average age of ships scrapped recorded 27.6, as of the end of July, comparing with 30.3 year-on-year.
Another recent statistics said that 767 vessels of a combined 35.1m dwt were sold for demolition year-to-date. Of them, about 31% are under the age of 25.
By May of 2012, vessels scrapped with ages under 25 accounted for 21%. Proportion of those sold for demolition with under 25 years has been increasing, 7% in 2009, 11% in 2010 and 13% in 2011.
With IMO's strengthening environmental regulations, shipowners are in a rush to replace old tonnages with eco-friendly fuel-efficient newbuildings. Therefore, demolition will keep growing for a while.