BIMCO: Capesize Scrapping Extravaganza Good for Dry Bulk Market

The activity on the demolition market is off to a good start in 2015 when looking at dry bulk tonnage, with Capesizes carrying the lions share, according to BIMCO.

In 2014, 25 Capesize ships totaling more than 4.2 million DWT were scrapped. With not even half of the year behind us the numbers have already more than doubled, says BIMCO.

During the first four months of 2015, 52 Capesizes with a total DWT of around 8.7 million have been sold for demolition. The numbers are hastily approaching the level of 2012 where a record total of 70 Capesize ships where scrapped.

Chief Shipping Analyst at BIMCO, Peter Sand, said: ”The high amount of Capesize demolition will benefit the segment. Although increasing scrapping was expected the actual development exceeded BIMCOs expectations. This could have a positive impact on the market.”

The demolition of Panamax ships has also been on the rise in 2015 and although the development is not quite on par with the Capesizes it is still substantial. In 2015 as much as 2.6 million DWT has already been sold for demolition equaling more than half of last year’s total where 4.8 million DWT were scrapped, according to BIMCO.

For Handymax and Handysize demolition has also increased in 2015. For Handymax just over 1 million DWT of tonnage has been scrapped so far in 2015, 34 % more than the same period last year. For Handysize the numbers are 2.2 million DWT so far, up 79% from last year.

”The increase in Capesize scrapping comes at a much needed time for the market. Looking at the development so far this year the fleet growth has actually been negative, with a reduction of 0.8 %,” said Sand. 

Source: BIMCO

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