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Dry bulk ship scrapping rates booming in 2015

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World Coal,

The dry bulk shipping demolition market has shown record growth this year, according to figures from international shipping association, BIMCO. Since the start of the year, demolition is up across all ship sizes in the dry bulk segment. Capesize vessels have taken the brunt of this with 52 ships at a total of 8.7 million DWT sold for demolition. This compares to only 25 ships in 2014.

“The high amount of capsize demolition will benefit the segment,” said Peter Sand, BIMCO’s Chief Shipping Analyst. “Although increased scrapping was expected, the actual development exceeded BIMCO’s expectations. This could have a positive impact on the market.”

The increase in demolition rates has also evident elsewhere, with the demolition of panamax ships up this year . So far, 2.6 million DWT has been sold for demolition this year – more than half of last year’s total of 4.8 million DWT. In the handymax and handysize segments, demolition rates are up 34% and 79% y/y.

The dry bulk shipping market has long suffered weak freight rates as demand weakened and supply boomed.

“The increase in capsize scrapping comes at a much needed tome for the market,” concluded Sand. “Looking at the development so far this year, the fleet growth has actually been negative with a reduction of 0.8%.”

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