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“In 2023, completely seven product tankers with blended deadweight tonnes (DWT) means of 265,000 had been recycled. This became a 365 days-on-365 days drop of 82% when put next with 1.5 million DWT (27 product tankers) recycled in 2022. It became also the bottom stage of recycling considered since records started in 1996,” says Niels Rasmussen, Chief Transport Analyst at BIMCO.

Necessary earnings and 2d-hand values, to boot to deal in newbuilding deliveries, hold seemingly contributed to the very low stage of recycling.

Clarksons Research estimates that realistic annual earnings per ship fell 15% in 2023 nonetheless had been peaceful at third very most realistic ranges since the monetary crisis hit in 2008. On the identical time, prices for 2d-hand ships rose 17% to the splendid ranges since 2008.

2023 also saw the bottom stage of newbuilding deliveries in extra than 20 years and despite document low recycling process, the snappy completely grew 2.1% 365 days-on-365 days.

“On account of low recycling process and newbuilding deliveries, the in trend age of product tankers increased by nine months at some stage in 2023 to the splendid stage since 2005,” says Rasmussen.

Which means, 12% and 39% of the product tanker snappy’s ships are extra than respectively 20 and 15 years extinct, equal to 9% and 35% of the snappy’s deadweight means.

In 2023 the fundamental fundamental steps to renew the snappy had been intervening time taken. Contracting of most up-to-date ships rose to a 10-365 days excessive and the present e-book extra than doubled in dimension, leaving the present e-book to snappy ratio at 12%.

As in previous years, MR and LR2 product tankers dominated the contracting, and the 2 segments make a contribution respectively 33% and 56% of the present e-book’s DWT means. Most contracts had been as soon as extra positioned with Chinese yards which now management 70% of the deadweight means within the present e-book.

On the opposite hand, deliveries will completely enlarge in 2025 when 10 million DWT means is scheduled for supply. One other seven million of the present e-book’s 23 million DWT are scheduled for supply in 2026. It’s in consequence of this fact also seemingly that recycling will launch to enlarge in 2025.

“As phase of the 2023 contracting, product tanker owners hold also taken extra steps to prepare for low carbon fuels. Currently, 97 ships are both ready or readied for different fuels (3% of snappy). The present e-book intervening time contains 60 such ships (19% of the present e-book),” says Rasmussen.
Source: BIMCO, By Neils Rasmussen, Chief Transport Analyst