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SINGAPORE—Scrapping
of aging ships that carry coal, iron ore and other
commodities may rise because of an increase in new
vessel deliveries starting this year, Thailand’s
Precious Shipping Pcl. said in its annual review.
Only
eight dry-bulk ships were scrapped globally last year
while 88 new vessels were delivered, resulting in a
2.6-percent increase to 3,164 ships across the world,
Precious Shipping managing director Khalid Hashim said
in a filing to the Thai stock exchange Tuesday. Precious
Shipping is Thailand’s biggest sea-transportation
company by market value.
The
Baltic Dry Index, an overall measure of
commodity-shipping costs, rose to a record in November
and more than doubled to 7,070 last year from 2006. The
strength in bulk-shipping rates has discouraged shipping
lines from scrapping aging vessels.
“It is
impossible to escape the conclusion that for the most
part, the ever greater age of more and more ships will
lead to an upswing in deletion rates in the near future,
regardless of the profitability of the underlying
markets,” Hashim said.
For
capesize ships, or vessels that can carry 175,000 tons
of cargo, 13 percent of the supply will be older than 22
years old and “likely to be scrapped during 2008 to 2011
should freight rates reach low enough levels,” Hashim
said. A total of 47 new capesizes are scheduled for
delivery this year, 139 in 2009 and 263 in 2010.
A total
of 436 panamaxes, or ships that can transport 70,000
tons of cargo each, are contracted for delivery from
2008 through 2010, Hashim said. About 228 ships will be
over 24 years by 2011 and may be scrapped between 2008
and 2011, he said.
About
1,141 so-called handysize ships will exceed 27 years old
by 2011 and are likely to be removed for demolition this
year through 2011 should freight rates drop sharply,
Hashim said.
About
332 new-handysize vessels will be delivered between 2008
and 2010. Handysize ships can each carry 10,000 to
39,999 tons of cargo.
Precious
Shipping will need to sell or scrap 26 of its ships,
which are more than 20 years old, over the next five to
seven years, Hashim said. The Bangkok-based shipping
company has 44 ships and has contracted to acquire 18
new ones from ABG Shipyard Ltd., India’s biggest
shipbuilder.
“The
company will continue to be on the lookout for the right
opportunities for additional fleet renewal as we would
like to achieve an annual fleet strength of between 50
and 70 ships within the next few years,” Hashim said.
Precious
Shipping has obtained a credit facility from a group of
local and international banks amounting to $500 million,
which it can use to purchase second-hand vessels, Hashim
said, without identifying the banks. (Bloomberg) |
