There has been a firm level of ship demolition activity in the first four months of 2015 and the two largest owner regions, Asia/Pacific and Europe account for 88% of the tonnage sold for recycling, according to the latest review of shipbreaking trend by Clarkson Research.
Whilst the Indian Sub-Continent remains the main demolition destination, recent activity has seen Bangladeshi breakers take the lead.
In 2015 so far, a reported 346 vessels of 10.8m GT have been sold for recycling. On an annualised basis, this is an increase of 43% in terms of GT, Clarksons’ data shows.
“This has been driven by a surge in bulker demolition, particularly Capesize vessels, in response to historically low earnings and fleet oversupply. Bulkers account for 74% of tonnage reported scrapped in the year-to-date,” the report said.
The Bangladeshi breakers have scrapped a reported 3.2m GT, 30% of the global total. This compares to 1.9m GT reported demolished in India and is the first time that Bangladeshi breakers have taken the lead since 2009, Clarksons said.
According to the shipping intelligence provider, firm bulker scrapping has boosted Bangladeshi volumes, representing 88% of the country’s demolition in the ytd. Further, recycling activity in India has been limited by currency volatility and a weak steel market.
European owners have generally recycled the largest volume of tonnage but more recently, Asia/Pacific owners have matched European demolition volumes and last year they scrapped 4.1m GT more than European owners (11.7m GT), accounting for over half of global demolition (52%).
In the ytd, Asia/Pacific owners are reported to have sold 4.8m GT for demolition compared to European owners’ 4.0m GT.
Clarksons attributed to Chinese demolition activity, boosted by the government’s domestic scrap subsidy. Chinese owners demolished a record 6.7m GT last year, equivalent to 30% of the global total, and they are reported to have sold 2.2m GT for scrap in 2015 so far.
Meanwhile, South Korean owners have scrapped 0.9m GT in the ytd, equivalent to 5% of their start year fleet on an annualised basis, the report said.
Elsewhere, the Greeks account for 54% of the region’s ytd demolition (2.2m GT) compared to a 39% share last year. German demolition volumes have risen in recent years and alongside Norwegian owners, they have scrapped a reported 0.4m GT each in the ytd – 20% of the region’s total.