Bulker Scrapping Hits Record High as Analyst Predicts "at Least 2 and a Half Years of Pain" for Dry Bulk

by Ship & Bunker News Team
Friday June 12, 2015

Bulker scrapping in the first quarter of 2015 hit a record high of 8.89 million dwt, according to data provided to Ship & Bunker by VesselsValue.com.

The total represents almost 87 percent of the combined total 10.27 million dwt of bulkers, containerships, LNG, LPG, and tanker vessels scrapped during the period.

"There's a lot of negative sentiment out there but there're some signs of an end in sight," said Braemar ACM shipping analyst Peter Malpas who was speaking on the matter at the recent Sea Asia event in Singapore.

"If we continue scrapping at that rate, we'll see fleet growth start to change by the early part of next year and the oversupply will start to erode by the end of 2016."

Market commentators back in February warned that the market was "collapsing," and dry bulk has had little positive news since.

Last month Drewry said ongoing low demand growth means the market is not expected to return to profitability until 2017, a view echo by Malpas who also noted that the significant amount of scrapping would lend support to a recovery.

"But there's no doubt we have at least two and a half years of pain in the dry bulk sector," he warned.

Last week Emanuele Lauro, co-founder, chairman, and CEO of Scorpio Bulkers Inc. (Scorpio Bulkers), said it had "made mistakes" and needed to "face the music" as it announced the further unloading of several newbuilds.

"We did not know just how bad the market was going to turn, it's a tragic scenario," he said.

Ship & Bunker News Team
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