Shipbroking giant expects strong demolition activity despite 20% year-on-year fall.
Clarksons expects ship demolition activity to say at “elevated”
levels in the medium-term despite a 20% fall in scrapping during 2017.
Clarksons counts 743 ships of a combined 32.7 million deadweight scrapped in the year to date.
This compares with the record 58.4 million deadweight record set in 2012 and the 44.5 million deadweight sent to the breakers in 2016, according to George Warner of Clarksons.
He says the slide this year comes despite elevated demolition prices and is due to improvement in market sentiment as some sectors begin to move away from the bottom of the cycle.
Warner explains that bulkers have accounted for more than half of capacity scrapped since 2009 and reached a record of 590 ships of a combined 33.4 million deadweight in 2012.
In 2017 the figure sits at 211 bulkers of 14.1 million deadweight, a 50% year-on-year fall in the face of firmer markets, the Clarksons researcher says.
Tanker scrapping, which peaked in 2010, has seen 95 vessels of 9.5 million deadweight weighed in so far this year. According to Warner this is a four-fold rise from 2016 levels.
Activity in the container market is also down from a record 194 vessels demolished in 2016, driven by the exit of old panamax vessels as new locks were opened on the Panama Canal.
This year, container scrapping is down by 35% to 137 boxships of 0.4m TEU, the world’s largest shipbroker says.
“Global demolition volumes have generally declined year-on-year, driven primarily by the bulkcarrier and containership sectors,” Warner wrote in a report.
“However, scrapping activity remains at historically elevated levels, and the costs of complying with upcoming environmental regulation are likely to sustain this trend in the medium term.
“This could continue to drive supply side rebalancing, potentially helping shipping markets to transition into the next stage of the cycle.”
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| Clarksons expects scrapping to continue at historically high levels. Photo: Clarksons |
Clarksons counts 743 ships of a combined 32.7 million deadweight scrapped in the year to date.
This compares with the record 58.4 million deadweight record set in 2012 and the 44.5 million deadweight sent to the breakers in 2016, according to George Warner of Clarksons.
He says the slide this year comes despite elevated demolition prices and is due to improvement in market sentiment as some sectors begin to move away from the bottom of the cycle.
Warner explains that bulkers have accounted for more than half of capacity scrapped since 2009 and reached a record of 590 ships of a combined 33.4 million deadweight in 2012.
In 2017 the figure sits at 211 bulkers of 14.1 million deadweight, a 50% year-on-year fall in the face of firmer markets, the Clarksons researcher says.
Tanker scrapping, which peaked in 2010, has seen 95 vessels of 9.5 million deadweight weighed in so far this year. According to Warner this is a four-fold rise from 2016 levels.
Activity in the container market is also down from a record 194 vessels demolished in 2016, driven by the exit of old panamax vessels as new locks were opened on the Panama Canal.
This year, container scrapping is down by 35% to 137 boxships of 0.4m TEU, the world’s largest shipbroker says.
“Global demolition volumes have generally declined year-on-year, driven primarily by the bulkcarrier and containership sectors,” Warner wrote in a report.
“However, scrapping activity remains at historically elevated levels, and the costs of complying with upcoming environmental regulation are likely to sustain this trend in the medium term.
“This could continue to drive supply side rebalancing, potentially helping shipping markets to transition into the next stage of the cycle.”