Given the current conditions, the shipping industry needs supply-side re-positioning to help the markets back to improved health, and increased recycling in recent years has been a clear part of this, according to Clarksons Research.
Since the start of 2009, a total of 206.6 million gross tons of shipping capacity has been sold for recycling, compared to an aggregate of 63.1 million of gross tons in the previous seven years.
This total includes 94.7 million of gross tons of bulk carrier tonnage and 29.1 million of gross tons of containerships, helping to address oversupply in the volume shipping markets.
According to Clarksons Research, the industry might be in a good position to keep the break going, in today’s terms at least.
In the tanker sector, which up until fairly recently was backed by stronger market conditions, the average age of scrapping in the year to date remains relatively high, at 25 years for crude tankers and 27 for product tankers. Given that a lot of older single hulled tanker tonnage was phased out in the 2000s, the amount of tonnage above the average age today is limited.
In the bulker and containership sectors, both under severe market pressure for some time now, the statistics are a little more revealing. Despite heavy recycling in recent times, the share of tonnage above the current average age of scrapping is 8% for Capesizes and 6% for Panamaxes. For boxships sub-3,000 TEU the figure is 10% and for those 3-6,000 TEU 12%.
In the 3-6,000 TEU boxship sector, the youngest ship sold for scrap this year was just 10 years old – around 50% of tonnage today is that age or older.
“The statistics tell us that around 75 million gross tons in the fleet is above the current average age of scrapping, 6% of the world fleet. At 2016’s rate of demolition, that’s another 2.4 years’ worth. And given the age profile of the world fleet, after another 2 years an additional 21 million gross tons will have crossed the current average age mark and after 5 years another 77 million gross tons,” Clarksons said.