Analysts at Alphatanker are predicting a protracted period of tanker scrapping brought around by a mixture of poor rates and the changing regulatory environment.
Alphaltanker recorded a total of 74 tankers being scrapped last year. In its latest weekly report, it anticipates 94 tankers to be recycled in 2018, noting that 16 have already been torched in the first three weeks already.
“Regulations will also have a knock-on effect in scrapping in 2019. As we project a large amount of inefficient tonnage to be scrapped in 2020, we anticipate scrap prices to come under pressure from oversupply. Therefore we expect some forward-looking owners to pre-emptively scrap their vessels in 2019 to take advantage of anticipated higher scrap prices. Our projections therefore suggest an acceleration of scrapping in 2019 followed by a deluge in 2020,” Alphatanker suggested while discussing incoming IMO legislation such as the sulphur cap.
“[O]ver the medium-term, scrapping is here to stay in tanker markets and that tighter regulations will help to modernize the fleet and improve fleet efficiency,” the analysts concluded.