Tanker Owners Get a Breather as Scrapping Ramps Up in Q3

The third quarter of 2017 saw the highest level of total tanker deadweight tons (DWT) sold for scrap in any quarter since 2010.

Some 4.98 million DWT or 2.69 million gross tonnes were sent for demolition during the quarter, according to the data compiled by VesselsValue. This equals to 40 tankers being sold for recycling during the three-month period.

In August tankers got over USD 400 per light displacement tonne (ldt) in the Indian Sub-Continent, a very appealing price for sellers.

Furthermore, high scrapping was also prompted by poor charter rates, which hit their lowest level in August since the start of this year, as explained by Olivia Watkins, Valuation Analyst.

What is more, Time Charter Equivalents (TCE) for Aframaxes were below USD 2,000 a day in August.

However, the trend doesn’t seem to be continuing into the fourth quarter of 2017 as charter rates have increased dramatically, going above USD 18,000, Watkins added.

A total of 73 ships were sent to scrapyards so far this year, removing 7.34 million DWT from the fleet.

With respect to types of tankers being sold for demolition in 2017, Aframaxes were predominantly the owners’ choice with 20 ships sold for recycling. Aframaxes were followed by Handy tankers (16), Small tankers (13), VLCC and Suezmaxes with 9 ships each, Panamax (5) and one Post Panamax.

The average age of tankers being sold for demolition this year stood at 24.9 years.

World Maritime News Staff

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