- COVID pandemic wiped 24.6 million TEU off container market growth
- EU tanker import tonne mile demand up 12% as ships avoid Red Sea area
- Demand shocks drive ship recycling to lowest level in 20 years
- 13% of world seaborne trade under attack from Houthis and Somali pirates
- Ships above 12,000 TEU drive 100% increase in average ship size
September crude oil tanker demolishing hits 39-months high at 1.9m DWT
Has the lid finally come off for crude oil tanker demolition in 2021? If judged by the 1.9m DWT of capacity that was removed in September, the answer is “yes”.
Despite this, it is still too early, however, to declare a sudden U-turn, as we have only seen 2.2m DWT scrapped in the previous eight months of this year.
For the month of September, 15 crude oil tankers, three oil product tankers, two small Handymax bulkers and no containerships have been demolished. For 2021 as a whole, just 15 containerships (average age of 28 years) have been demolished, a testament to a spectacularly profitable container freight market. A freight market which is in sharp contrast to that of crude oil tankers.
Whereas September did not bring around any sudden events, that could prompt October to see high crude oil tanker demolitions too, the removal of three high steel content super tankers bringing in USD 27.4m per ship to its owners, may be a one-off.
“The increasing number of VLCCs being demolished is the main driver behind this 39-months high. Still, in addition to the four 25-year-old VLCCs, we had one Suezmax, four Aframaxes removed from the actively trading fleet in September adding to the much-needed rebalancing of the supply and demand balance of the market,” says Peter Sand, BIMCO’s Chief Shipping Analyst.
“Spot market freight rates for all sizes of crude oil tanker are still loss-making as we head into the early winter market, which often brings about positive surprises to the spot market freight rates, while denting the demolition interest at the same time,” Sand says.
Posted:
07 October 2021
BIMCO's Shipping number of the week
ELSEWHERE ON BIMCO
Contracts & Clauses
All of BIMCO's most widely used contracts and clauses as well as advice on managing charters and business partners.
Learn about your cargo
For general guidance and information on cargo-related queries.
BIMCO Publications
Want to buy or download a BIMCO publication? Use the link to get access to the ballast water management guide, the ship master’s security manual and many other publications.
