26 October 2013

'Hard realities' to slow shipbreaking:

Global: Given the anticipated 20% reduction in this year's shipbreaking activity, the record set in 2012 already seems like a far-away memory, according to Wirana Shipping Corporation.

At the recent Marine Money Conference in the Greek capital Athens, the company pointed out that the shipbreaking industry went from recycling a 'meagre' 300 ships in 2009 to selling for scrap over 1300 vessels in 2012; as a result, the demolition market advanced from a US$ 1 billion annual turnover to a 'massive' US$ 6 billion.

But latest available figures, covering this year's January-September period, tell a drastically different story: India, for example, has seen a decline from 4.4 million LDT in 2012 as a whole to just 2.35 million LDT so far in 2013. India has received just 250 vessels to date in 2013 compared to more than 500 last year.

Meanwhile, Bangladesh and Pakistan are expected to sustain a 20% drop in shipbreaking activity when compared to last year. Wirana cited deflating steel prices in local markets, ongoing oversupply in the global fleet and steady orders for new fuel-efficient vessels as the 'hard realities' of the marketplace.

The 'balancing factor'

It added: 'In 2012 alone, 213 Capesizes were delivered; against that, only 73 were scrapped. In 2013, only 30 were scrapped til August, with deliveries lower, but still about 69 Cape+VLOC vessels were delivered.' Recycling should be the 'balancing factor', said Wirana, but 'recycling numbers have dropped and the agony seems to be getting prolonged'.

Based on the recent spike in dry charter rates, total scrapping by the year-end will be 'even slower', the company added.

Source: recycling international. 24 October 2013

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