South Korean owner SK Shipping has sold four LNG carriers for demolition in an unprecedented multi-ship move that sends a clear signal to other players considering the future of their elderly steam turbine vessels.
Brokers said a lone cash buyer has picked up the South Korean-built, 138,000-cbm steam turbine-driven sister ships SK Summit (built 1999), SK Supreme, SK Splendour and SK Stellar (all built 2000) for $469.50 per ldt.
The pricing puts the total fee for the membrane-type ships, which are listed as being between 75,135 dwt and 76,064 dwt, at just over $55.1m, or about $13.8m each.
They were sold on an “as is” basis in Singapore. A final recycling destination has yet to be disclosed.
Demolition brokers described it as a “good deal” for the seller and in line with the improvement in pricing in recent weeks.
They hope the transaction will lift flagging recycling levels in the last few weeks of the year.
TradeWinds reported in mid-October that the SK Shipping LNG carriers were among those being named as up for sale as they near the end of their long-term contracts with domestic importer Kogas at the end of 2024.
At the time, the 138,306-cbm SK Sunrise (built 2003), held in a joint venture with Japan’s Iino Kaiun, was also mentioned as a sales candidate.
Brokers said SK Shipping initially withdrew its quartet from the market but then recirculated it, and the en-bloc sale was concluded over several days last week.
TradeWinds has contacted SK Shipping for comment. The shipowner has not previously responded to any questions.
There have been no en-bloc sales of LNG carriers in modern times, and although numbers have begun to tick up since around 2018, just a trickle has been sent to the breakers each year.
Only three LNG carriers have been sold for recycling to date in 2024. The sale of SK Shipping’s vessels bumps up the tally to seven — equal to the number sent for demolition in 2021.
SK Shipping has been having a clear-out this year.
It was the first LNG shipowner out of the blocks, sending its 127,125-cbm Moss-type LNG carrier YK Sovereign (built 1994) for demolition.
In an unrelated move, it has also been inviting offers for recycling or further trading on two modern vessels, the 174,100-cbm SK Spica and SK Serenity (both built 2018).
They are laid up after issues with their Kogas-designed membrane-type containment systems were discovered shortly after delivery.
But the scrap sale of four LNG steamships in one hit is expected to create waves among shipowners with elderly tonnage, particularly those with redelivering vessels or already idle tonnage.
Brokers said at least 30 steamships are up for sale, either publicly or privately.
They expect others to flow onto the market, including more South Korean-controlled ships built to lift domestic imports.
Steam turbine ships are being increasingly marginalised in the charter markets due to their small sizes, inefficiencies and lack of ability to meet tougher emissions regulations.
They are also being redelivered from long-term charters onto a severely and unusually weak winter market, where rates for steamships are at levels below their operating expenses.
The LNG steamer fleet numbers around 200 vessels. Of these, almost 80 are 20 years old, with 10 listed at more than 30.
About 75 steamships are due to be redelivered from their charter contracts in the next 24 months.
