Despite calls from many luminaries in dry bulk for the sector to get back to scrapping, owners simply are not listening.
Clarkson Research notes in its most recent weekly report, for instance, that capesize demolition has declined by over 50% year-on-year in tonnage terms with 2.1m dwt reported scrapped in 2017 so far.
“The improvement in freight rates in the dry bulk market in 2017 so far has been sufficient for owners to continue trading their older vessels,” Clarkson Research reported, suggesting bulker demolition is likely to remain “muted”.
Nevertheless, very decent rates are on offer from south Asia. Lion Shipbrokers reports, for example, the Cape Tavor, a 1999-built ship, has just achieved a firm $346 per ldt from recyclers in Bangladesh.
For dry bulk, global shipowning body BIMCO maintained in its annual markets preview that it is vital 30m dwt of ships are scrapped this year as there is a serious influx of new tonnage coming in from Asian yards this year and next.
“This is not a tall order in theory, but the slowdown in scrapping seen since June 2016 causes alarm bells to ring,” BIMCO noted. BIMCO expects the supply-side to grow by around 1.6% in 2017, as compared to 2.2% last year.