Archives for posts with tag: dwt

Half way through the year, and in aggregate tonnage terms the statistics show that the demolition market has been fairly busy. Scrapping of tonnage can act as a useful “pressure valve” in times of surplus capacity and challenging market conditions, and here we take a closer look at the extent to which this year’s vessel recycling might (or might not) be relieving some of the stress.

Key Dry-ver This Year

In the post-downturn era, ship scrapping peaked in 2012 at 58.5m dwt. Whilst levels then softened a little, 1H 2015 saw a total of 24.9m dwt sold for recycling. This helped offset around half of the 49.9m dwt delivered into the world fleet, moderating growth in global capacity to 1.4%. At a macro level this looks like a helpful “pressure valve” but has this really been the case and can the impact last?

Well, at 19.8m dwt (262 units), bulker demolition has already exceeded the full year 2014 total, and accounted for 79% of all tonnage scrapped in 1H 2015. Activity has been strongest at the larger end, with 68 Capesizes sold for recycling, compared to only 25 in the whole of last year and 51 Panamaxes scrapped, compared to 69. So, in reality, most of the impact of the elevated level of demolition in the first six months has been in one sector. Total bulker demolition has almost counterbalanced the 1H 2015 deliveries of 26.6m dwt (though slowing trade growth has also kept the market under pressure). Volumes in other sectors this year have actually been fairly subdued. On an annualised basis, dwt capacity sold for scrap outside the bulker sector in 1H 2015 was down by 42% year-on-year.

Shorter Shelf Life

Meanwhile, the age of bulkers scrapped also shows an interesting dynamic. In 1H 2015, the average age of bulkers sold for demolition fell to 24.9 years old from 27.2 in 2014, and the average age of Capesizes scrapped fell to 20.7 years. The recycling of younger units has been driven by depressed earnings and the relatively youthful age profile of the fleet; today 79% of bulkers are less than 15 years old compared to about 50% ten years ago.

Breaking Down The Factors

However, bulker scrapping has already begun to slow in recent months, and this could continue if owners become less willing to scrap more ‘youthful’ tonnage (in slightly improved market conditions). Furthermore, on the demolition market itself, sources report quieter, more uncertain conditions and weaker sentiment. Key markets are importing plenty of cheap Chinese finished steel products. This all weighs on demand from breakers for fresh candidates, and ship scrap prices have fallen.

Record Breaking Or Not?

So, despite the run-rate in the first half suggesting at a glance something close to record recycling levels this year, the impact of demolition as a “pressure valve” has not been that broad. And although the full year demolition total will likely be fairly robust, there are now some question marks over the extent to which the flow will be maintained. For those who follow the demolition market statistics, there’s plenty to watch out for post-Ramadan. Have a nice day.


Changes in the composition of the world fleet are nothing new, and have been a recurring theme throughout the history of the shipping industry. The twenty-first century has been no exception. At the start of 2000 the world fleet totalled 788 million dwt, but today’s fleet and orderbook combined total more than 2.0 billion dwt, and alongside this expansion the make-up of the fleet has also continued to change.

Bulk Boom Bulge

Clarkson Research tracks the world fleet and orderbook of over 90,000 ships. The Graph of the Week shows the difference in each vessel sector’s share of the total fleet in terms of both vessel numbers and dwt capacity, comparing start 2000 to today’s fleet and orderbook combined. It comes as no surprise that the clearest gain in share belongs to the bulkcarrier sector. During the ordering boom of the mid-2000s bulkers were often the investors’ ship of choice, spurred on by ramped up earnings and dry bulk trade growth averaging 7% during the period 2003-07. On the basis of today’s fleet and orderbook, bulkers account for a 11% greater share of world fleet dwt than at start 2000, and a 4% larger share of fleet numbers.

The tanker fleet meanwhile has seen its share of the world fleet decline over the same period; the overall tanker fleet saw its share of dwt capacity fall by 8%. Although 317m dwt of tanker tonnage was ordered in the years 2003-08, activity in other sectors has seen the tanker tranche slim down. Crude oil trade growth this century has been limited to an average of 1% per annum, although more positive growth in oil products volumes (5% per annum on average) has driven requirement for product tankers, helping maintain the tanker share of vessel numbers.

Liner Alignment

On the liner side, the containership sector has seen a significant growth in its share of tonnage. Robust trade volume growth of an average of 8% per annum this century has ensured a requirement for rapid growth in capacity. However, that has not been the only factor. In capacity terms container tonnage has also benefitted over the period from the increasing containerization of general cargo trade. Whilst the containership share of global tonnage has increased from 8% to 13%, the shares constituted by general cargo ships, MPPs, ro-ros and reefers have all decreased in dwt and number terms.

What’s Next?

The world fleet product mix continues to evolve. The consensus view seems to be that the more rapid growth in requirement for more specialised tonnage will see the share accounted for by, for example, gas, container and offshore units expand. In the period shown here, the offshore sector, led by the numerically strong OSV fleet, has already increased its vessel number share by almost 3%.

However ‘wildcards’ also come into play(few foresaw boxships as large as 18,000 TEU back in 2000) and ordering patterns are determined by a range of factors not just demand fundamentals. If prices look attractive, shipping investors often turn back to the sectors in which they are comfortable, and the composition of the fleet doesn’t always evolve as it seems it logically should. So, for the latest trends, watch this space. Have a nice day.


SIW1110In the movie Super Size Me, a film-maker investigated what would happen to him if he ate nothing but fast food for a month, consuming a ‘super-sized’ meal every time. A casual glance at industry headlines over recent years would reflect the fact that shipping is involved in its own super sizing experiment, with news of larger and larger ‘megaships’ hitting the water in many sectors.

Super Sizing

The average vessel size in the world cargo fleet covered by Shipping Intelligence Weekly has increased from 17,470 dwt at the start of 2000 to 28,572 dwt today. Whilst broad ship size ranges are often well established, owners still search for economies of scale, and there can be a tendency for ‘size creep’ with designs increasing incrementally in capacity over time. But in many sectors there have been landmark steps forward to new larger vessel sizes, such as the containerships up to 18,000 TEU in size being delivered today. Demolition of older ships following the downturn has also supported upsizing. In 2013, the average size of a delivered ship was 53,235 dwt, whilst the average size of a unit demolished was 44,238 dwt.

Bigger Than Mac

But upsizing isn’t universal, and the graph illustrates the trends in the three main sectors. The tanker fleet has hardly upsized at all. The average size at the start of 2000 was 85,323 dwt, and today that stands at 86,248 dwt. However, the containership fleet has seen significant upsizing as operators have searched for lower unit costs. In 2000 the average size of a boxship was 24,716 dwt and today that figure is up 71% to 42,496 dwt. Consistent ordering of larger ships has driven this trend, and in TEU terms the average size has risen even more rapidly, by 97% from 1701 TEU to 3367 TEU. The size of the largest ship in the fleet has increased from 9,600 TEU to 18,270 TEU. That’s a long way from the 58 containers loaded onto Malcolm McLean’s Ideal-X which undertook the first container voyage in 1956.

Interestingly, the bulkcarrier upsizing trend has been just as strong. The average bulker size has increased from 50,235 dwt in 2000 to 72,640 dwt today, helped by heavy Capesize deliveries, the introduction of VLOCs, and upsizing into the Supramax (and now Ultramax) and Kamsarmax size ranges. Growth in the average size of 44% is lower than in the container sector, but equivalent to an average rise of 1,590 dwt pa compared to 1,262 dwt for box-ships.

Going Large

So, the shipping industry has had its own bout of supersizing. Yet, although some sectors have definitely ‘gone large’ it hasn’t been universal. In previous eras, upsizing has often found a limit, but today there’s no clear end to the trend yet. The average vessel on order is currently a whopper of 64,370 dwt. With the right amount of seaborne trade, there will hopefully be enough to feed everyone, but upsizing creates additional capacity and shipowners will be hoping they don’t get left with a nasty bout of indigestion.