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Scrapping levels slow as demand rises for older tonnage
There has been a decrease in the rate of scrapping tugs and workboats as owners find work for vessels over 30 years old, but there is little employment for single-screw tugs
Rising demand for towage, ship support, harbour operations and offshore shallow-water work has led to older tugboats and workboats being retrofitted and upgraded instead of being scrapped.
Scrapping rates have slowed in the past six months as owners find creative ways to keep their elderly vessels in employment.
According to Marcon International, vessels sold for demolition are those too costly to repair and unlikely to be sold.
“The decline in scrapping is a cause of the increase in demand for tugs and barges we have seen in certain areas of the market, especially when a shortage of units with desired specifications exists,” said the US-based shipbrokers in the latest tug market summary.
It cited data from Sea-Web, which reported 2,396 tugs worldwide had been scuttled, broken up or prepared for scrap worldwide in the pevious year at the end of May 2024.
This is up 6.9% from May 2023, when it reported 2,242 tugs taken out of the market.
There have been variable scrapping levels in the past five years, with a sizeable increase during and after the global Covid-19 pandemic and a slowdown as commercial activity picked up.
Since May 2019, there has been a 58.7% increase in the number of tugs scrapped, according to Sea-Web and Marcon, with a sizable portion of those reported in 2021 and 2022.
“Available for sale units have dropped considerably with many of those being scrapped due to age and condition,” said Marcon.
“Single-screw tugs, having been relegated to nearly zero commercial work, except in certain specific cases, continue to be scrapped as few buyers are interested.”
Another consideration is the small size and low value of tugboats and workboats compared with tankers, bulk carriers and container ships, which owners can sell for scrap.
Therefore, owners often keep inactive tugs and workboats laid up instead of recycling them.
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