A second capesize in three weeks has been reported sold for demolition, suggesting that underwhelming earnings for such ships may yet provide work for underemployed scrapyards.
Cash buyer Best Oasis said in its latest weekly report that the 174,100-dwt Star Tianjin (built 2004) is heading towards the scrapyard.
According to Clarksons, the vessel is changing hands for $600 per ldt on an “as is” basis in the east Indian port of Vizag.
Chartworld Shipping, the Lou Kollakis-led company listed as manager of the ship, did not respond to a request for comment. Until late last year, the Star Tianjin was trading as Mineral Tianjin in the fleet of Belgium’s Bocimar.
If confirmed, the Star Tianjin would be the youngest capesize to be sold for demolition since December 2020, according to VesselsValue.
The “premium price” reflects a large quantity of bunker fuel remaining on board, Clarksons said, and there is “speculation the unit could be fixed for a short trade”.
Regardless of the deal’s particularities, however, a second sale of a capesize within three weeks can only mean good news for a demolition market that has been disappointing.
According to the latest Clarksons figures, demolition sales have declined at an annual pace of 41% so far this year to 9.4m dwt.
“Against the backdrop of cooling bulk carrier earnings, there appears to be potential for an increase in older bulk carrier tonnage entering the recycling market,” Clarksons said.
Older and less fuel-efficient capesizes without scrubbers have fared particularly badly in freight markets lately, with earnings consistently below operating expenses.
A first step in removing some of that tonnage came in mid-August, when Golden Union, another Greek owner, reportedly sold its oldest ship, the 171,500-dwt Captain Veniamis (built 2001), for about $550 per ldt.
Any large-scale scrapping revival, however, looks unlikely so long as India remains the only destination where large units can be scrapped.
Floods affecting large parts of Pakistan have “severely disrupted” activity at demolition yards there.
Rivals in Bangladesh continue facing financial constraints as yards are barred from obtaining letters of credit above $3m.
“End-buyers from Alang are maintaining their offer price levels due to the pertaining scarcity of units available in the recycling market resulting in competitive bidding among recyclers to secure tonnage,” Best Oasis wrote.
