Online valuation and data provider VesselsValue reports that the first half of 2021 saw 275 cargo vessels sold for scrap, up 40% and 33% compared to 2020 and 2019, respectively.
The 275 scrapped vessels have a combined DWT of 11.9 mil and a total scrap value of over $1 billion. A total of 131 tankers were scrapped, accounting for nearly half of all cargo vessels scrapped in first half 2021.
VesselsValue says that the increasing scrapping numbers are a direct result of exceptionally high scrapping prices, which rose and continue to rise throughout 2021. The end of first half 2021 saw container scrapping prices reach $600/LT, levels not seen for nearly 13 years. The surge in scrapping prices has been fueled by the ever growing rise in steel price and demand.
The unprecedented earnings seen in fist half 2021 for the bulker and container sectors saw owners capitalize in both the charter and S&P market, turning their back on the demolition market despite the lucrative scrapping prices. Tanker owners, however, were more tempted by the high scrapping prices, but still, says VesselsValue, the majority are choosing to cling onto older assets in the hope of a full market recovery.”