Scrapping in drybulk shipping may outpace last year's tonnage by a nautical mile if the sector's woes continue, according to Safe Bulkers' Polys Hajioannou.
"This year we could be surprised by the number of scrapping that we will see," the chief executive said earlier today during a fourth-quarter earnings call.
"If this low-freight market persists for two, three months or four months, many people with older ships will consider all options."
He said demolitions could quadruple this year from last year's low of five million tonnes if charter rates keep sputtering amid the US-China trade flap and Vale dam disaster.
"This year, we could see 15 million or 20 million if the freight market does not perform and also the cost of dry-docking keeps going high," he said.
Average drybulk charter rates have fallen to $7,149 per day from $11,901 per day since the beginning of the year, according to Clarksons.
Pending IMO 2020 regulations may also escalate scrapping, president Loukas Barmparis said.
