The Wall Street Journal reports that “A sharp decline in dry cargo ship freight rates in the first quarter sent more giant ships to scrapyards in Southeast Asia in the first three months of the year.”
According to data from Bloomberg Markets, the Baltic Exchange Dry Index is down 43 percent for the year-to-date, incentivizing more ship owners to scrap their vessels. According the WSJ, “ship-broker BTIG said in a report that 107,000 deadweight metric tons of ship steel were recycled in the first three months of this year, up 35% from 78,000 metric tons in the same period a year ago. Of 23 vessels scrapped, 16 were capesize vessels, the biggest cargo ships that move products such as iron, aluminum, coal and cement from mines in Australia and Latin America to China.” But improved Chinese demand for iron ore and other bulk commodities is expected to contribute to a slowdown in the volume of ship scrappage later this year, the Journal reports.
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