This trend will accelerate in later years as a result of the IMO Ballast Water Management Convention, according to the latest edition of the ‘Tanker Forecaster’, published by shipping consultancy Drewry.
However, as the fleet is relatively young, recycling will be moderate in the next couple of years.
The new BWMC will result in some owners bringing forward their vessels’ fourth special surveys, if they fall around the scheduled convention’s enforcement deadline, in order to delay retrofitting BWTS to the fifth special survey.
Vessel owners for which the survey is due after mid-2018 will probably have to either retrofit BWTS or scrap their tonnage.
The additional cost of retrofitting BWTS along with the special survey will force many owners to scrap younger vessels before the next survey is due, the consultancy said.
Drewry estimated that about 74 crude tankers (14 mill dwt) and 114 product tankers (5.6 mill dwt) have their fourth special survey due between mid-2018 and 2021, making them potential victims of the new regulation.
“We do not expect all these vessels to be scrapped, since many of them are on long-term charter at attractive rates, justifying the additional cost of retrofitting BWTS,” said Rajesh Verma, Drewry’s lead analyst for tanker shipping.
“As tanker rates will remain well above operating costs during the forecast period, many owners might opt to operate their vessels after incurring this additional cost in anticipation of a recovery in rates. However, since the tanker market will be oversupplied, older vessels will find it difficult to get employment, which in turn will force many owners to scrap their tonnage just before their next survey is due,” he said.