On 2 November 2020, it will be 500 days since the last VLCC left active service when it went on its final journey from Jeddah to Bangladesh for dismantling, Peter Sand, BIMCO’s Chief Shipping Analyst noted.
In fact, the 500 days is the second-longest streak without any demolition sales of VLCC crude oil tankers since 2009.
Sold at USD 440 per ldt, the Japanese built “Watban” contained a lot of steel and brought USD 20.8 million to its owners.
According to BIMCO, vital crude oil tanker market earnings from August 2019 through July 2020 have evaporated any interest in demolition sales.
While, by end-October 2020, spot freight rates for all oil tankers sit at a loss-making level for owners and operators.
Currently, candidates for demolition sale contain less steel than “Watban” and the steel price in Bangladesh is USD 360 per ltd., bringing in around USD 15 million for an average VLCC.
Since the last demolition sale, 57 newbuilds have been delivered, contributing to a fleet growth of 52% since the start of 2011.