Sliding freight rates send more big bulk ships to scrapyards

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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.

* Mor Prosperity; one of the two newly acquired vessels by Morlap Shipping Company.

But analysts expect a slow recovery in Chinese imports of commodities such as iron ore will likely boost demand and put the brakes on recycling later this year.

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, aluminium, coal and cement from mines in Australia and Latin America to China.

Shipowners generally step up scrapping when the cost of operating vessels or idling and maintaining them outweighs the price of scrap metal.

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Vanguard Newspaper