Demolition rates slow as BDI improves

An increase in the Baltic Dry Index (BDI) in April saw scrapping rates tail off, after record quarterly demolition figures in 1Q16.

“With BDI hitting an all-time low in February 2016, the dry bulk market saw a quarterly record volume of demolished ships in the wake of it,” said BIMCO’s Chief Shipping Analyst, Peter Sand.

“Subsequently, demolition activity came to a halt as BDI increased from March to a peak at 703 on 25 April 2016,” Sand continued.

Dry bulk demolition and Baltic Dry Index. Source: BIMCO. Clarksons.

According to Sand, the shipping industry “needs to break the trend of halting demolition activity as soon as the BDI improves marginally,” if it is to see a long-term improvement in market fundamentals.

“We can only improve the fundamental market conditions if ship-owners are keeping demolition activity up consistently,” concluded Sand.

Edited by Jonathan Rowland.

Read the article online at: https://www.worldcoal.com/handling/31052016/demolition-rates-slow-as-bdi-improves-2016-856/