LNG carrier demolition sales have already reached an annual record with nearly 30% of the year still to go.
Data from Clarksons Research show 0.8m dwt worth of LNG carriers have been sent for demolition this year as weak market conditions have led to several steam turbine units being disposed of.
“This is a pattern that has been witnessed for the past twelve months and one we expect to see continued as demand for vintage steam-turbine LNG tonnage is weak and numerous old units remain unsold and laid-up,” suggested an update from broker Gibson.
Gas carriers heading for their final destinations in South Asia are virtually the sole source of business for ship recyclers at the moment.
“Presently, no segment except LNG seems to be opening for recycling,” stated a weekly report from cash buyer Tirana. The container sector, for instance, is on track to record its lowest demolition total for the past 20 years, according to analysis from Clarksons.
“Recycling market sentiment has moved firmly into negative territory amid persistent currency volatility, recent tariff adjustments across the Indian sub-continent, weakening steel demand in domestic markets and a tightening supply of tonnage,” Clarksons Research noted in its latest weekly report.