World News
Rise in Tankers Going for Scrap
The number of crude oil tankers heading for the scrapyard has increased to levels not seen since the 1980s.
The view, reported by Bloomberg, belongs to Global Marketing Systems (GMS), a global buyer of ships ready for the scrapyard.
Older vessels currently fetch as much as $18 million because demolition yards are competing to win them, according to Anil Sharma, the chief executive of GMS.
"Tanker scrapping in 2010 wasat one of the highest levels in many decades and we believe the total number in 2018 will most likely be higher than that," Sharma was quoted as saying.
Driving the rise is the falling number of crude oil cargoes as Organization of Petroleum Exporting Countries and other producers restricted crude output by 1.8 million barrels a day from the start of last year.
The coming International Maritime Organisation sulfur cap on bunker fuel is another factor undermining the commercial case for running a tanker.
"Incoming regulations are raising costs for all shipowners making high scrap prices relatively more attractive," Brian Gallagher, head of investor relations at tanker operator Euronav NV, was quoted saying.
"Elevated price of steel means high recycling prices for tankers," the executive added.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 655.50 | 2.00 | 808.50 | 4.50 |
| Rotterdam | 619.00 | 0.00 | 789.00 | 8.00 |
| Houston | 628.50 | 7.50 | 812.50 | 1.50 |
| Fujairah | 653.50 | 4.50 | 900.00 | 2.50 |
| Global 20 Ports Average | 672.00 | 0.50 | 885.00 | 7.00 |
| Global 4 Ports Average | 639.00 | 2.50 | 827.50 | 2.00 |
| Global Average Bunker Price | 727.50 | 1.50 | 933.50 | 5.00 |
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