Unfavorable freight rates in the oil product market coupled with an uncertain outlook and strong demand for steel are driving the demolition rate for product tankers toward record levels according to a new analysis from BIMCO. The shipping industry trade association forecasts that demolitions of product tankers could reach levels not seen since 2010 and if the oil spot market continues to be depressed the trend could spread to crude oil tankers.
BIMCO’s analysis shows that in the first four months of 2021, the amount of oil product tanker capacity sold for demolition has already reached the total capacity scrapped in both 2019 and 2020. They believe that unfavorable freight rates are the key contributor noting that if the current pace continues 2021 could break records for the total capacity removed for the market…
