201 Ships Scrapped During First Half of 2019

The first half of 2019 saw 201 cargo vessels sold for demolition (sum 2 million tonnes) 75% were scrapped at either Bangladesh or India, with Bangladesh receiving the majority share. Scrapping numbers were down c.18% compared to the first half of 2018. This is a knock on effect from the collapse of the Brumadinho dam in January, which has affected cargo supply and therefore charter rates.

Demolition rates peaked later into the first half of this year, compared to last year, as tonnage supply became more scarce and yard availability and appetite grew. H1 of 2018 saw rates peak during mid March at 470/465 ($ per LDT) for tankers and bulkers respectively. H1 2019 saw a lower and later peak of 465/460 ($ per LDT) towards the end of April.

The oversupply in the Offshore sector continues to see scrapping deals outweigh newbuilding orders, reducing the offshore vessels operating on the water. 79 vessels were scrapped in the first half of 2019, down c.23% compared to the first half of 2018.

Cargo
The below graph shows a breakdown of the number of Cargo vessels, by type, scrapped in first half of 2019 and 2018

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Bulker Demolition activity in the bulker sector has increased c.55% compared to the first half of 2018.

Small Dry The small dry sector was the only sector to remain consistent in terms of the number of vessels scrapped, in comparison to last year.

Container The first half of 2019 saw a significant increase of c.370% in container scrappage. Total TEU scrapped increased by over 100,000 compared to first half of 2018.

Tanker The number of tankers scrapped in H1 2018 was 3 times the number of tankers scrapped in the first half of this year, showing a clear dive in the number of tankers scrapped this year.

LNG The positive outlook on the gas sector continues to see little scrappage. Only two LNGs were scrapped in the first half of 2019, both for delivery in Bangladesh.

LPG The number of LPG vessels scrapped fell from 26 in H1 2018 to 7 in H1 2019, a c.73% decrease.

Reefer The Reefer market continues to cut numbers, with a further 16 being scrapped in H1 2019, a slight decrease from the 20 that were scrapped in H1 2018.

MODU an increase in rig count and a sustained higher oil price has resulted in less scrapping. The number of MODUs sold for demolition at the start of this year has decreased by a half compared the first half of 2018.

OSV scrapping remains strong in the OSV sector, with Tidewater Marine scrapping 18 OSVs in H1 2019.

OCV The number of vessels scrapped in H1 2019 matched the number scrapped in H1 2018.

Conclusion
As Bangladesh continues to clear its beaches and rates remain relatively stable for the foreseeable future, scrapping may have a quiet start to Q3.

Source: hellenicshippingnews