According to Tradewinds, large bulkers, such as capesizes and panamaxes, have seen the largest fall in second values over the past year. Prices for a five-year-old capesize have fallen 27% in the past twelve months to $44.6m, according to the latest Baltic Sale & Purchase Assessment. And what ‘s even worse is the rates for the bulk carriers.
Besides, the historic high scrap price and the severe slump in shipping market also accelerate bulker scrapping worldwide this year. Sources say that prices achieved can even allow some owners cash that can be put down as a deposit on modern secondhand tonnage. Demand for steel is very high in India and the scrap price is over $500 per ldt, which are making shipowners more easily choose to dispose of old vessels
The number of large bulkers sold for demolition so far this year has reached 31 and industry players forecast the number would hit the peak this year.
It’s a relatively simple decision for shipowner to choose to operate or dispose of the old vessels and we’re seeing an increasing flood of bulk carriers being sold for scrap every week, with 7m tonnes sold for scrap so far this year compared with 6m tonnes in all of 2010.
As scrapping is gaining speed recently, many expect the over-supply would be eased to some extent down the road.