Tanker scrapping during the third quarter hit the highest level in more than a decade, says DNB Markets.
Analysts led by Nicolay Dyvik counted 4.4 million deadweight of crude tankers sent to the breakers’ beaches in the three months to the end of September.
“This amounts to an annualised scrap rate of 4.3% of the fleet and is both in absolute and relative terms the highest scrapping for a quarter since the third quarter of 2003 when 5.3 million dwt was scrapped,” DNB Markets says.
Weakness in the freight market fuelled the upturn, with the analysts placing VLCC spot rates at an average of $12,300 per day during the quarter.
The heavy scrapping seen during the third quarter pulled fleet growth below 5% on an annualised basis for the first time since the fourth quarter of 2015, DNB Markets says.
According to Maritime Strategies International the pickup in tanker scrapping has set the scene for a resurgence in demolition volumes that looks set to be maintained beyond the end of the year.
It predicts 5.9 million dwt of tankers will be scrapped in 2017 compared with the 2.5 million dwt recorded in 2016.
MSI’s optimism is not only driven by the weaker market. Its statistics show the number of vessels over the age of 20 has reached 6.3% of the tanker fleet, up from 3.9% in 2012.
Higher prices have also played a part. Tsakos Shipping & Trading of Greece secured around $415 per ldt for the 300,000-dwt La Paz (built 1995) when it was scrapped in September, as TradeWinds reported at the time.
MSI says prices are now around $115 per ldt greater than in September 2016.
