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Home Industry Opinions VesselsValue demolition report, June - October 2021

VesselsValue demolition report, June – October 2021

Since the end of the first half of the year, there have been 163 cargo vessels sold for demolition, a 4.5% increase on the same period in 2020 when 145 vessels were scrapped, and a 63% increase from 2019 when only 100 vessels were scrapped. These vessels had a combined DWT of 6.3 million and a minimum combined scrap value of over US$825 million.

57 of these vessels were acquired by buyers in Bangladesh, constituting over a third (35%) of all vessels sold. A total of 49 vessels were sent for demolition in India, constituting 30% of the sales. Both countries harbour strong buying appetites as their construction industries bounce back from Covid-19 lockdowns.

Pakistan trailed behind accounting for only 14% of demolition deals with a total of 23 vessels sent for scrap. This was likely due to the Pakistani rupee reaching all-time lows against the dollar, decreasing the buying power of Pakistani shipbreaking yards.

Between the end of June and the end of October 2021, the average Indian Subcontinent scrap price across bulkers, tankers and container ships rose by around 5% from US$590/lt to US$620/lt. Scrap prices peaked around the end of August and have since stabilised, marking the end of a period of strong and significant growth.

At the end of October 2021, the scrap price for a tanker was US$620/lt. By contrast, prices in October 2019 were US$390/lt. Applying these scrap prices to a typical VLCC of 44,000lt produces two very different residual asset values. Today the residual price of a VLCC is US$27.7 million, compared to October 2019 when the same vessel would achieve a price of US$19.8 million. Although the difference is significant, at about US$8 million, levels have not quite reached all-time highs seen back in 2008, when scrap prices almost reached US$760/lt.

Recent trends in Subcontinent scrap price can be seen in the following figure

Average Indian Subcontinent scrap steel price of bulkers, tankers and container ships.


Throughout 2021, bulker freight rates have increased significantly. For example, the Capesize 54 TCA increased from US$32,604/day on 30 June to a peak of US$86,953/day on 7 October, an increase of 167%. Rates have since declined to US$47,950/day on  25 October. Unsurprisingly, this has slowed down the number of bulkers being sent for demolition.

31% of the vessels scrapped between the end of June 2020 and the end of October 2020 were bulkers, accounting for a total of 48 ships. Today, due to the booming charter market, this number has fallen to only eight bulkers, a drop of 83%.

Example demolition sales are shown below:

Bulker demolition sales for 30th June – 25th October. Sales with undisclosed price omitted.

Container ships

As is widely reported, 2021 has been a record-breaking year for the container shipping sector, with port congestion and increasing demand causing freight rates to reach incredible highs.

Just as with bulkers, the percentage of container ships scrapped between June and October 2021 has dropped dramatically since last year as shipowners have been holding onto their tonnage. There were only two boxships scrapped between 30 June and 25 October 2021, representing a 94% decrease from 2020, where 34 ships were sent for demolition.

The vessels scrapped were two 32 and 34 year old feedermaxes, sent for HKC “Green Recycling” at Alang, India.

Container ships demolition sales for 30 June – 25 October.


112 tankers have been scrapped between the end of H1 2021 and today, making up 69% of all cargo vessels scrapped in the same period. For comparison, in 2020 only 26 vessels were scrapped. Following a year of stagnant freight rates in 2021, owners are understandably capitalising on the booming scrap prices and scrapping tonnage.

With the upcoming winter and countries slowly lifting travel restrictions, we may see a tanker rally and consequently a foot on the breaks for tanker demolition sales.

Tanker demo sales for 30 June – 25 July. The two sales with the highest scrap prices for each ship type are shown.

Overall, scrapping for bulkers and container ships is unlikely to increase whilst both benefit from a booming charter and S&P market, despite the rising scrap steel prices. Those same high scrap prices, coupled with sedentary freight rates, will ensure that tanker scrap numbers remain steady until rates can break free of their current position.

Author of the article: Joey Daly - Cargo Analyst at VesselsValue

After graduating from Warwick in 2021 with a BSc. in Physics, Joey joined VesselsValue as a valuations analyst specialising in the maritime industry. Joey works closely with the research and sales teams to ensure that VV continues to deliver reliable and accurate intelligence to both clients and press.

While his recent focus has been in the demolition market, he looks to specialise in gas and sustainability.

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