Record Numbers of Ships Head for Demolition as Rentals Plunge

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Tuesday, 25 November 2008

Record numbers of obsolete merchant ships are being sold for scrap after the biggest decline in rents on record, a cash buyer of such vessels said. At least 23 merchant ships, including commodity carriers, container ships, car transporters and oil tankers, are either waiting off the coast of India or Bangladesh or were driven onto their beaches to be demolished, Cumberland, Maryland-based Global Marketing Systems Inc. said in a report e-mailed yesterday. It didn't say what the previous record was Bangladeshi companies that demolish ships are becoming ``nervous'' that an ``abundance'' in supply will mean lower scrap prices, prompting them to pay less, GMS said.
Among vessels being scrapped is a ``plethora'' of ships designed to haul coal, ore and grains, according to GMS, which negotiates the purchase of about 100 ships a year for demolition.
The Baltic Dry Index, a measure of the cost of hiring commodity carriers, has fallen 93 percent below its May 20 record.
Adapted from Bloomberg