BIMCO forecasts recycling of over 15,000 ships by 2032

BIMCO has forecast more than 15,000 ships, equivalent to more than 600m dwt, more than a quarter of today’s trading fleet, could be recycled by 2032, up more than 100% on the last 10 years.

Over the past 10 years, 7,780 ships with a deadweight capacity of 285m tonnes were recycled. Most of the deadweight capacity recycled – 60% – was built during the 1990s. In the next 10 years, ships built during the 2000s will be the main source of recycling, according to BIMCO projections, a decade where the global fleet expanded dramatically.

Historically about 50% of bulk, tanker, and container deadweight capacity has been recycled by the time the ships would have been 25 years old and 90% by 30-35 years old. Applying this recycling pattern to the currently trading ships gives BIMCO the 15,000 ship scrap number for the coming decade with the association’s chief shipping analyst Niels Rasmussen suggesting today that many older ships are expected to be recycled earlier than normal due to the ever-tighter limits on greenhouse gas emissions.

Tonnage sent for demolition remained at subdued levels last year, totalling no more than 10m dwt, according to data from broker BRS, the lowest in over a decade and well below the 29m dwt 10-year average.

Analysts have long been talking up prospects for an avalanche of vintage ships heading for demolition amid a period of growing green regulations and the global merchant fleet getting older and older.

The average age of the main fleets is increasing with bulkers now at 11.1 years versus 8.7 years five years ago, tankers standing at 11.7 years versus 10.1 five years ago, and containerships at 13.7 years versus 11.4 in 2018, according to Clarksons data from late February. Clarksons estimates that 31% of the current fleet by tonnage would be D or E rated under the recently enacted Carbon Intensity Indicator (CII) assuming recent trading patterns and no changes in speed or the technology status of vessels.

Looking at tankers, the latest data from Braemar shows 20+ year-old ships now represent nearly 8% of the tanker fleet, up from 2.2% in 2019.

The fleet replacement figures are the flipside of the projected scrap numbers, something Asian shipyards are having to consider today.

Mark Williams, who heads up UK consultancy Shipping Strategy, has urged yards to massively increase capacity to ensure shipping meets its green goals as stipulated by the International Maritime Organization (IMO).