The combination of suppressed freight rates, high bunker fuel prices and high prices being offered by shipbreakers would continue to stimulate ship scrapping, Buchanan predicted.
Quoting figures from Clarkson Research Services, he said that 6.7 million dwt of dry bulk carrier capacity had been scrapped so far this year compared with 5.7 million dwt in the whole of 2010. The year-to-date 2011 figure included 25 Capesize bulk carriers, which Buchanan said was more than were scrapped in the whole of 2010, but did not give a comparative figure.
Buchanan noted that more shipbreaking capacity was coming on stream. "Bangladesh yards have resumed operating and have begun purchasing dry bulk vessels [to break]," he said, adding that Bangladesh shipbreaking yards typically pay higher prices for ships than their competitors in other parts of the Indian subcontinent.
He also said older ships were being discriminated against in the charter market, "which is why scrapping is on the increase."
Source: Platts. By Anthony Poole, anthony_poole@platts.com
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