Soaring Scrap Rates See Surfeit of Tankers Head to the Breakers Yards

WORLDWIDE – It would appear container rates aren't the only facet of ocean shipping which are rising rapidly. The latest report from VesselsValue indicates that soaring scrap values are behind a rise in the number of ships heading for the breakers of late.

The report says that the first half of 2021 saw 275 Cargo vessels sold for scrap, up 40% and 33% compared to 2020 and 2019, respectively. These ships had a combined DWT of 11.9 million tonnes and a total scrap value of over $1 billion.

The report says that the extreme scrap prices, costly new environmental regulations (sulphur cap, BWMS etc) and an ever ageing fleet was the perfect blend to see scrapping numbers blown out of the water and some impressive records to be set.

Tankers were the big scorers with 131 sold for scrap up to June, however with Containers and Bulkers making so much money, and Tankers having done so previously, owners are now believed to be hanging onto their vessels despite the huge temptation from scrapping prices. This of course only serves to drive the price even higher.

Furthermore there is a hint that a price war is going on with Bangladesh briefly knocked off its top spot in March as Pakistan offered more competitive scrap pricing. During April, all three subcontinent countries, Bangladesh, India and Pakistan suffered due to rising Covid-19 cases. India was particularly impacted as it saw another set of lockdown restrictions imposed.

Bangladesh still took the lion’s share in H1 2021, scrapping 106 vessels, up 80% from H1 2020. India and Pakistan scrapped 53 and 51 vessels respectively, down from their impressive performance in the latter half of 2020.

To read the report in full simply click HERE.