31 August 2012

Scrapping to Accelerate:

After global financial crisis bombed the market, scrapping has kept increasing.

Analyst Park Mu-Hyun of E*Trade Securities said historically, increase in scrapping has followed after growing newbuilding delivery and shipping market won't be recovered without growth in demolition.

Commercial ships go to scrapping yards in various reasons, such as old ages, old-fashioned technology, rise in steel-plate price, etc. The biggest attraction is outdated vessels, as they consume more fuels with lower efficiency than competing tonnages.

Park said that continued high fuel price pressures ship owners and accelerates aging. Also, imbalance between tonnage demand and supply drops freight rates and even younger vessels become unprofitable.

These all led to increase in demolition and scrapping in 2013 is expected to exceed the overall amount of those scrapped in the last three years.

Also, he analyzed that when tonnage diminishes, demand for fuel-efficient eco-friendly vessel will grow.

Source: E Ship Trading. 17 August 2012
http://en.eshiptrading.com/news/d/222/2984/

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