BIMCO Friday released
an analysis showing that dry bulk shippers in China are scrapping younger
vessels, in a trend that is becoming more common globally amid the current
shipping downturn.
Peter Sand, Chief
Shipping Analyst at BIMCO noted that Chinese firms have recently been scrapping
dry bulk vessels built between 1998 and 2000, while the rest of the dry bulk
industry has favored older vessels built between 1995 and 1997 for scrapping.
BIMCO noted that the
younger age for Chinese scrapping is likely due to government subsidies put in
place in 2013 and extend two more years during 2015.
"The program may
in nature be distortive and put in place to inspire an increase in newbuilding
orders, nevertheless the increased scrapping volumes is good for the
fundamental market balance," BIMCO noted.
It was further said
that the global dry bulk industry is moving toward scrapping of progressively
younger vessels, as the downturn in the sector wears on.
BIMCO's statistics
showed that the average age of ships scrapped in 2013 was 28.2 years, while in
2014 this dropped to 27.3 years and in 2015 the average fell again to 25.3
years.
"The recent
development in the scrapping age, is set to continue in 2016," said Sand.
BIMCO noted that over
the past three years, 23 percent of dry bulk capacity built between 1995 and
1997 has been scrapped, amounting to 11.8 million DWT, with the group saying
that "scrapping remains the only permanent way to better the fundamental
balance" in the currently oversupplied market.
Earlier this month,
Ship & Bunker reported on BIMCO research showing that lower newbuilding
prices are failing to entice buyers in the dry bulk sector.
Source: ship and bunker. 23 December 2015
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