Decommissioned cruise ships are being dismantled at Aliaga ship-breaking yard in the Aegean port city of Izmir, western Turkey, October 2, 2020. REUTERS/Umit Bektas

Tanker Sector Leads Demolition Surge in First 6 Months of 2021 -VesselsValue

Mike Schuler
Total Views: 2692
August 13, 2021

A total of 275 ships were sold for scrap in the first half 2021 with the tanker sector leading the charge, according to a half-year demolition review by UK-based VesselsValue.

The number represents a 40% and 33% increase compared to 2020 and 2019, respectively.

The 275 scrapped vessels have a combined deadweight of 11.9 million tonnes and a total scrap value of over $1 billion, VesselValue said. A total of 131 tankers were scrapped, accounting for nearly half of all ships scrapped in H1 2021.

“The increasing scrapping numbers are a direct result of exceptionally high scrapping rates, which rose and continue to rise throughout 2021,” VesselsValue said. “The end of H1 2021 saw Container scrapping prices reach 600 USD/LT, levels not seen for nearly 13 years. The surge in scrapping prices has been fuelled by the ever growing rise in steel price and demand. A demand catalysed by lockdown restrictions causing logistical issues for construction sites across the world.”

Unsurprisingly, the bulker and container sectors “turned their back” on the demolition market, despite the lucrative prices, amid higher charter rates and a robust S&P market.

“Tanker owners, however, were more tempted by the high scrapping prices, but still, the majority are choosing to cling onto older assets in the hope of a full market recovery,” VesselsValue said.

In the offshore sector, financial pressures due to Covid-19 had owners scrapping non-core assets, including some as part of pre-packaged Chapter 11 bankruptcy agreements.

VesselsValue’s full first-half 2021 demolition review can be found here.

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