A prediction regarding the strengthening of the market in short-term is difficult, Frontline's CEO, Robert Hvide Macleod was quoted by Reuters as saying. He continued adding that, provided that oil demand increases as it is expected, the tanker market will experience an interesting second half of 2018. This can be facilitated if scrapping increases.
Furthermore, in the case of a weak winter season, operators will possibly proceed to scrapping vessels that are less efficient to operate from their fleet, Reuters reported.
Spot rates for VLCCs, with the ability to transport 260,000 tonnes of oil, have decreased to a loss-making $13,000-14,000 per day. While the rates for small Suezmaxes are also on a low level.
Recently, India drafted a legislation, which aims to safeguard labour safety and environmental protection from shipbreaking. India along with Bangladesh, are the two countries dismantling most of the discarded ships.
The regulation complies with the Hong Kong convention, which was adopted by IMO in 2009, and have been ratified by Norway, Congo, France, Belgium, Panama and Denmark.