Thursday, 22 March 2012 ' 00:00
Source: Clarksons
The amount of tonnage sent for demolition in 2011, 41.2m dwt, was the highest on record. However, this total is projected to be surpassed in 2012.
This months Shipbuilding Focus looks at why the demolition market is set to experience a second consecutive year in which the volume of scrapping is the highest on record.
The Scrap Gap
As shown by the Graph of the Month, 2009 experienced the highest volume of scrapping (33.3m dwt) since 2003 (35.4m dwt).
This was primarily a result of the global downturn in 2009, with scrapping increasing by 134.5% y-o-y as average tanker earnings fell by 65.0% y-o-y, and average bulker earnings by 66.6%.
The crash in containership timecharter rates also led to a record amount of containership demolition (7.5m dwt).
However, the amount of capacity sold to breakers fell in 2010, as a relative rally in the bulk cargo markets meant that many owners delayed scrapping their old vessels to take advantage of this.
Year of the Removal Men
In 2011 the rate of demolition increased by 48.2% y-o-y, primarily due to particularly ferocious dry bulk scrapping.
In 2011, bulker demolition accounted for 54.1% of the total global amount scrapped in terms of dwt, compared to 23.0% in 2010.
Average bulker earnings decreased 41.3% y-o-y, to their lowest point since 2002, (whilst in December 2011, the bulk carrier 5 year old secondhand price index fell to its lowest level since June 2004).
This combination of reduced earnings and falling secondhand prices led many owners to send vessels to the breakers.
The amount tonnage in the dry bulk fleet over 25 years of age fell by 16.5% during 2011, but 11.4% of capacity remained over 25 years of age by the years end.
Even More Scrap?
Currently, 2012 is projected to see 49.1m dwt of tonnage demolished.
The abundance of new, often more efficient tonnage (162.4m dwt of new capacity was delivered in 2011), increases the likelihood that older vessels will be scrapped, especially as increases in bunker prices are adversely pressuring earnings (as of January 2012, the price of 380cst in Singapore had increased by 186% since January 2009).
These increasing costs, particularly for older vessels, combined with the introduction of new environmental regulations, could tempt some owners to start renewing their fleets.
The recent decline in newbuild prices (the bulk carrier newbuilding price index fell by 17.6% between July 2010 and February 2012) could also encourage this.
Furthermore, tanker demolitions are set to increase in 2012, providing that the court action which disrupted the activities of breakers in Bangladesh have now been permanently resolved.
Containership scrapping is also on the increase, with timecharter rates at their lowest level since 2009.
So, 2012 is projected to be the highest year on record for demolitions, surpassing the capacity removed in 2011.
Older vessels will face increased competition from tonnage delivered in 2011, with increases in bunker prices further pressuring earnings.
The re-opening of Bangladesh should also mean greater scrapping demand. On the back of these factors, 2012 should be a bumper year for breakers.
http://www.hellenicshippingnews.com/News.aspx?ElementId=5fc7d79c-00c4-4830-b344-76af6e08ad95&utm_source=newsletter&utm_medium=email&utm_campaign=daily
Source: Clarksons
The amount of tonnage sent for demolition in 2011, 41.2m dwt, was the highest on record. However, this total is projected to be surpassed in 2012.
This months Shipbuilding Focus looks at why the demolition market is set to experience a second consecutive year in which the volume of scrapping is the highest on record.
The Scrap Gap
As shown by the Graph of the Month, 2009 experienced the highest volume of scrapping (33.3m dwt) since 2003 (35.4m dwt).
This was primarily a result of the global downturn in 2009, with scrapping increasing by 134.5% y-o-y as average tanker earnings fell by 65.0% y-o-y, and average bulker earnings by 66.6%.
The crash in containership timecharter rates also led to a record amount of containership demolition (7.5m dwt).
However, the amount of capacity sold to breakers fell in 2010, as a relative rally in the bulk cargo markets meant that many owners delayed scrapping their old vessels to take advantage of this.
Year of the Removal Men
In 2011 the rate of demolition increased by 48.2% y-o-y, primarily due to particularly ferocious dry bulk scrapping.
In 2011, bulker demolition accounted for 54.1% of the total global amount scrapped in terms of dwt, compared to 23.0% in 2010.
Average bulker earnings decreased 41.3% y-o-y, to their lowest point since 2002, (whilst in December 2011, the bulk carrier 5 year old secondhand price index fell to its lowest level since June 2004).
This combination of reduced earnings and falling secondhand prices led many owners to send vessels to the breakers.
The amount tonnage in the dry bulk fleet over 25 years of age fell by 16.5% during 2011, but 11.4% of capacity remained over 25 years of age by the years end.
Even More Scrap?
Currently, 2012 is projected to see 49.1m dwt of tonnage demolished.
The abundance of new, often more efficient tonnage (162.4m dwt of new capacity was delivered in 2011), increases the likelihood that older vessels will be scrapped, especially as increases in bunker prices are adversely pressuring earnings (as of January 2012, the price of 380cst in Singapore had increased by 186% since January 2009).
These increasing costs, particularly for older vessels, combined with the introduction of new environmental regulations, could tempt some owners to start renewing their fleets.
The recent decline in newbuild prices (the bulk carrier newbuilding price index fell by 17.6% between July 2010 and February 2012) could also encourage this.
Furthermore, tanker demolitions are set to increase in 2012, providing that the court action which disrupted the activities of breakers in Bangladesh have now been permanently resolved.
Containership scrapping is also on the increase, with timecharter rates at their lowest level since 2009.
So, 2012 is projected to be the highest year on record for demolitions, surpassing the capacity removed in 2011.
Older vessels will face increased competition from tonnage delivered in 2011, with increases in bunker prices further pressuring earnings.
The re-opening of Bangladesh should also mean greater scrapping demand. On the back of these factors, 2012 should be a bumper year for breakers.
http://www.hellenicshippingnews.com/News.aspx?ElementId=5fc7d79c-00c4-4830-b344-76af6e08ad95&utm_source=newsletter&utm_medium=email&utm_campaign=daily
24/3 2012 12:26 fcras 0
54816 More ships to be scrapped this year
Saturday, 24 March 2012 ' 00:00
Ship scrapping will rise 19 per cent to a record this year as stricter environmental rules prompt owners to sideline older vessels in favour of newer, more fuel-efficient designs, said Clarkson Plc.
Demolitions will increase to 49.1 million deadweight tonnes, surpassing the current all-time high of 41.2 million tonnes reached last year, London-based Clarkson, the world's largest shipbroker, said yesterday.
Ship fuel, or bunkers, almost tripled in price since January 2009, lowering returns for older vessels with higher consumption, Clarkson said.
Reduced new-ship prices and tougher regulations aimed at curbing emissions may also encourage owners to renew their fleets, according to the shipbroker's monthly World Shipyard Monitor.
"Older vessels will face increased competition from tonnage delivered in 2011, with increases on bunker prices pressuring earnings," the shipbroker said.
Scrapping of tankers and containers will increase this year, Clarkson forecast. Fifty-four per cent of all ships demolished last year were dry-bulk carriers that transported minerals and grains, spurred by a slump in hire costs to the lowest level since 2002.
Source: Bloomberg
http://www.hellenicshippingnews.com/News.aspx?ElementId=3ae43066-b6e0-4400-8b99-51bd3f0dd20a&utm_source=newsletter&utm_medium=email&utm_campaign=daily
Saturday, 24 March 2012 ' 00:00
Ship scrapping will rise 19 per cent to a record this year as stricter environmental rules prompt owners to sideline older vessels in favour of newer, more fuel-efficient designs, said Clarkson Plc.
Demolitions will increase to 49.1 million deadweight tonnes, surpassing the current all-time high of 41.2 million tonnes reached last year, London-based Clarkson, the world's largest shipbroker, said yesterday.
Ship fuel, or bunkers, almost tripled in price since January 2009, lowering returns for older vessels with higher consumption, Clarkson said.
Reduced new-ship prices and tougher regulations aimed at curbing emissions may also encourage owners to renew their fleets, according to the shipbroker's monthly World Shipyard Monitor.
"Older vessels will face increased competition from tonnage delivered in 2011, with increases on bunker prices pressuring earnings," the shipbroker said.
Scrapping of tankers and containers will increase this year, Clarkson forecast. Fifty-four per cent of all ships demolished last year were dry-bulk carriers that transported minerals and grains, spurred by a slump in hire costs to the lowest level since 2002.
Source: Bloomberg
http://www.hellenicshippingnews.com/News.aspx?ElementId=3ae43066-b6e0-4400-8b99-51bd3f0dd20a&utm_source=newsletter&utm_medium=email&utm_campaign=daily
