To Scrap or to Scrub?

20 Jul 2018; 

Tanker scrapping has been on an upswing this year and in a recent interview, an executive from the demolition industry highlighted the main drivers for demolition in the tanker industry: (the outlook for) freight rates, current scrap prices and the demolition activity in other shipping segments are always a factor.  Regulatory changes can also be a driver, particularly if there are significant rule changes on the horizon.  The phase out of single hull vessels in the period 1999-2003, for example, pushed up demolition levels during that period.  At the moment, the requirement to install ballast water treatment systems and the IMO 2020 sulphur cap for bunker fuels are factors that owners need to consider.  Let’s consider each of these drivers and see how they may impact scrapping in the coming years.

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