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Scrapping on record pace in 2012

Global – As a result of the ‘€˜feverish pace’€™ of new-building deliveries, 2012 will prove to be a record-breaker in terms of the scrapping of older vessels across all shipping segments, Hellenic Shipping News Worldwide has reported.

This year’€™s scenario has been almost the exact opposite of that of 2008. While scrap yards were seen pleading with ship owners to sell them some of their older carriers in order to make up for the many closures throughout India and Bangladesh, owners eager to scrap their vessels are now ‘€˜enjoying an unprecedented boom’€™.

Scrapping activity hit record heights during this year’€™s January-October period, a recent update from shipbrokers Intermodal has pointed out. ‘€˜All ships scrapped so far in 2012 amount to 55 million tonnes of active carrying capacity, compared to 44 million tonnes seen in 2011,’€™ remarks its analyst John N. Cotzias. ‘€˜So we may well see that more than 1500 ships, surpassing 60 million tonnes dwt, will have been beached this year.’€™

Mr Cotzias continues: ‘€˜It is interesting to note how important a role the intensive scrapping has played in keeping the balance between the massive number of new-building deliveries and the growth in sea-borne trade.’€™ Net fleet growth for bulkers during the first 10 months of this year was 9.6%, which could easily climb up to around 11% by the end of the year.

And he concludes: ‘€˜With steel prices still keeping firm, backed by a strong demand, and iron ore prices holding steady, we anticipate that demand for demolition candidates will remain strong during 2013, keeping the offered prices relatively close to today’€™s levels. This way, we may continue to see many ships leaving the active fleet, alleviating a heavily saturated and over-capacitated market that will likely hold through the last big lot of new-building deliveries in 2013.’€™

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