The oversupply of vessels in most shipping sectors is so intense that it’s become clear to ship owners that unless they scrap as many of their older ships as possible, freight rates are expected to remain at break-even lows or even worse.
This has become particularly evident in the dry bulk shipping market, where the industry’s benchmark, the Baltic Dry Index has dropped to just 753 points at the end of January - down more than 60% since late last year.
Nikos Roussanoglou, Hellenic Shipping News Worldwide, wrote: “January ended with 17 vessels reported to have been headed to the scrap yards of total deadweight 1 009 630-tonnes. In terms of the reported number of transactions, the demolition activity has been marked with a 23% week-on-week decline, due to 30% lower volume of demolition transactions in the bulk carrier segment, whereas there has been a 28% increase regarding the total deadweight sent for scrap.”
