Source: Xclusiv According to Xclusiv’s analysis, “in the dry market, subdued recycling activity began in January 2021. Since then, monthly recycling has consistently remained below 1.5 million DWT, averaging 0.
4 million DWT. From January 2021 to July 2024, a total of 17.3 million DWT of carrying capacity was demolished.
In 2020, 15.3 million DWT were scrapped, which is only 12% less than the total scrap of 17.3 million DWT recorded over the subsequent 43-month period.
On the other hand, the tanker market saw 13.6 million DWT scrapped in 2021, a year impacted by the Covid-19 pandemic, which suppressed oil demand and freight rates. However, from 2022 to the present, amidst the Russian invasion of Ukraine and the Red Sea crisis, only 6.
2 million DWT have been demolished”. The shipbroker added that “while bulker scrap values have remained relatively stable compared to the previous year, tanker scrap prices have declined by around 5%. The Indian subcontinent, encompassing India, Bangladesh, and Pakistan, is currently offering scrap prices 6-7% below the three-year average for both bulkers and tankers.
Conversely, Turkey presents a more lucrative option, with scrap prices approximately 8% higher than the historical average”. Source: Xclusiv As a result, “the subdued recycling activity of the past years has resulted in the ageing of the bulk carrier and tanker fleet. Currently, the average age of the bulk carrier fleet is approximately 12 years.
Within this fleet, 1,878 vessels are aged 20 years or older, representing a 16% increase compared to two years ago. The average age of the tanker fleet is currently 13 years, which is almost one year older than it was two years ago. Within this fleet, the number of vessels aged 20 years or older has increased by 70% compared to two years ago, reaching a total of 1,397 vessels.
This aging of the tanker fleet, coupled with a similar trend in the bulker fleet, is primarily due to sustained high rates in both markets, leading to increased vessel utilization”, Xclusiv concluded. Nikos Roussanoglou, Hellenic Shipping News Worldwide.
