Scrap prices for dry-bulk ships plunged 13 percent in the past year as oversupply and unprofitable charter rates prompts owners to scrap vessels

According to Bloomberg News, shipbreakers paid about $425 a ton for commodity carriers last month, compared with $490 a year earlier, based on Clarkson (CKN) Plc data. The tonnage sold in the first half rose 25 percent from a year earlier to 16.2 million tons.

“Owners haven’t got any option other than to scrap.It can definitely be deemed as a buyer’s market.”

Panamax vessels have led the jump in scrapping with 56 sold for demolition in the first half compared with 38 a year earlier, according to Clarkson. The tonnage sold has risen 33 percent to 3.37 million tons.

Older vessels “just cost too much” to operate. “It’s better for the shipping company to scrap” as such ships are also unlikely to comply with current regulations for ballast water and carbon emissions.

courtesy: Bloomberg News