Seatrade Maritime is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

9264147fed9afbfc6ae0d8308767c067_XL

Record capesize scrappings seen this year

This year is likely going to be a record one for scrappings in the dry bulk sector, according to GMS Shanghai trader Jamie Dalzell.

"We think it's going to be a record for the dry bulk market," he said at a panel on the dry bulk market at the 9th Marine Money Hong Kong Ship Finance Forum. Giving latest figures from his firm, Dalzell said they expected to see 50 capesizes being scrapped within the first quarter alone, which he pointed out is more than half the total number of 96 capesizes scrapped for the whole of last year.

And the imperative for a "scrap now" policy as panel moderator Clarkson Asia managing director Martin Rowe put it, is even greater with prices are set to drop as supply increases and buyers hold back as the year wears on, noted Dalzell.

He pointed out that while prices have come up about 25% in the last month or so, they had dropped by half in the 18 months before that. "We've had a short spike which we don't think is going to last because a lot of owners are taking vessels out of lay-up and going for scrap," he said. Dalzell said current prices of about $300 per long ton (lt) can easily go down to $250 per lt and even the $225 per lt level seen earlier this year.

Bringing another factor into the equation, Wah Kwong ceo Tim Huxley chipped in the fact that the so-called eco premium from more modern ships has so far been negated by the prevailing low oil price.

But this is a tenuous situation. "If the fuel price goes up a lot more of those inefficient ships are going to go, which is what's needed," declared Huxley.

Hide comments
account-default-image

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish

Panama_Webinar_Leaderboard_FINAL.jpg