Demolition sales reached more than $1bn in the first half of this year beating 2020 levels by 40%, according to VesselsValue.
The London-based ship valuation company said 275 cargo vessels were sold for scrap in the six-month period, amounting to 11.9m dwt.
Demolition volumes were spurred by a rally in scrap prices.
Container scrapping prices hit a 13-year high of $600 per ldt in the first half of the year. Scrap prices increased at rate of $0.86 per ldt per day, VesselsValue said.
VesselsValue cargo analyst Guy Cooper expects demolition prices could set new records in the second half of this year.
“If this growth rate continues, then the 2008 all-time high of $754 per ldt will be reached by the end of the year,” Cooper said.
It appears that level may have already been surpassed. Brokers reported that earlier this month the 8,200-dwt Parsa (built 1991) sold for demolition in India at $1,060 per ldt, or about $3.3m in total.
A hike in iron ore and steel prices has also contributed to the increase in demolition volumes as scrap steel prices soared.
“The surge in scrapping prices has been fuelled by the ever-growing rise in steel price and demand,” Cooper said.
Tankers accounted for about half the scrapping volumes, as demolition sales in the sector increased fourfold on last year.
Booming rates in the container and dry bulk markets encouraged owners to sell on or trade their older vessels, rather than send them to the scrap yard.
As a result container scrapping fell 78% compared with last year.
Bangladesh handled the most tonnage in the first half of 2021, scrapping 106 vessels — an 80% increase on the previous year. India scrapped 53 ships and Pakistan recycled 51 vessels in the period.
Cooper said 2021 has been an exceptional year for demolition.
“Extreme scrap prices, costly new environmental regulations and an ever-ageing fleet was the perfect blend to see scrapping numbers blown out of the water and some impressive records to be set,” he said.
