320 ships scrapped last year

PUBLISHED : Friday, 03 February, 1995, 12:00am
UPDATED : Friday, 03 February, 1995, 12:00am

A TOTAL of 320 vessels aggregating over 20 million tonnes was scrapped last year, according to London shipbrokers, E A Gibson.

About 16 million tonnes of this included tankers and combis, with dry cargo tonnage making up the balance.

After the failed sale of the Susangird, the final number of very large crude carriers (VLCCs) sold during the course of last year was 40.

Twenty-three were delivered or intended to be delivered to Pakistan, 10 to Bangladesh, six to India and four to China.

As demand increased in the sub-continent and prices began to rise, from the middle of the year, from US$160 up to $180 per light weight tonne (lwt), China was unable to compete and no VLCCs, and very few other vessels, were bought for this area in the second half of the year.

Among the dry cargo tonnage, 64 bulkers (and ore carriers) were scrapped, including 11 Capesize carriers.

Demolition prices worldwide remained steady for the year, with sub-continental prices at least $20 higher than levels in China.

Prices of VLCCs rose steadily, and vessels sold in the last quarter achieved at least $20 per lwt more than they did earlier this year.

Although there are other countries involved in the demolition industry, Pakistan, India, Bangladesh and China accounted for the majority of the 320 vessels scrapped during the course of last year (see table).

The VLCC Oslo Princess has been reportedly sold this month to cash buyers for Bangladesh at $181 per lwt.

It is understood that the majority of competitive offers for this vessel was made for delivery in Bangladesh, with fewer buyers chasing for India.

According to E A Gibson, the second-hand market continues to be dominated by activity in the dry cargo sectors and, in particular, sales in the handy-size up to Panamax vessels.

The Capesize market appears to buck this trend, for though freight rates have been as buoyant as in other areas, there has been a lack of activity recently on the second-hand side.

'There remains a lot of tonnage built in the late 1070s and the early 1980s, for sale, but little interest,' the broker said.

'Of course, the newbuilding sector is on fire with over eight million deadweight tonnes due to be delivered this year and similar levels next year.' Such statistics have frightened off many owners to the extent that some commentators are now predicting the next shipping crisis in the Capesize segment, according to the broker.

However, several positive signs remain. Freight market predictions are bullish, underpinned by continued growth in the global economy.