The 2015 appears to be running on a path toward becoming another record year in the dry bulk demolition activity.
The monthly average for the first six months in 2015 is 3.3m DWT. In 2014 the first half year averaged at 1.33m DWT per month, according to the stats presented by international shipping association BIMCO.
April 2015 saw 5.36 million DWT being retired from active service, which was the highest on record ever for a single month, BIMCO said.
The record came on the back of continued poor earnings and deteriorating market conditions in dry bulk shipping, evidenced by the Baltic Dry Index (BDI) staying below 600 from 2 February to 13 May.
68 Capesizes demolished so far in 2015
In 2012, which is the largest demolition year on record with 33.4m DWT leaving the fleet, the monthly average was 2.79m DWT.
Based on these figures, it can be derived that we might be heading for an even higher level in 2015.
The preliminary amount of dry bulk tonnage being demolished during the first half of 2015 is 20 million DWT. During the first half of 2012 we saw 18 million DWT leaving the fleet.
Chief Shipping Analyst at BIMCO, Peter Sand, says: “As the year progresses, BIMCO expects the demand side to get stronger in connecting with rising volumes. This should positively impact the market conditions but at the same time also limit the demolition activity.
In line with our recent adjustment of expectations for demolition activity in 2015, we do not see a new record year in spite of the strong start of the year.”
A total of 262 dry bulkers being demolished in 2015
According to BIMCO, since the beginning of the year a total of 68 Capesizes have been demolished, therefore it can be expected that the record from 2012 where 70 Capesizes were demolished during the full year could soon fall.
The Handysize segment was the busiest sub-segment in all of the six months when activity by number of ships being recycled is measured. A total 104 Handysizes have left the fleet for good so far in 2015. The total number of dry bulkers being demolished now stand at 262 ships for the year.
The fleet growth is the largest amongst the dry-bulk segments as newbuilt Supramaxes keep coming from the shipyards. However, earnings have out-performed all the other dry-bulk segments from mid-February to end of June, leaving little reason for engaging more often with the blow torch for Handymax owners.
“The relatively low level of Handymax scrapping is a testament to a versatile sub-segment which is able to deliver what the market wants even when the overall demand side is losing ground. Fleet growth for Handymax/Supramax segments stand at 3.5% since the turn of the year” , adds Peter Sand.