2.3.2 Volume Forecast of Scrapping Vessel
1) Scrapping volume of Tanker
According to the Tanker Register by Clarkson, the registered tanker in 1997 in the world is 3,182 vessels (277.9 million DWT), of which a number of vessels larger than 20,000 DWT is 2,157 vessels (218.9 million DWT). 381 vessels (109.3 million DWT) out of 2,157 are Very Large Crude Oil-Carrier (VLCC). A number of single hull tanker that will turn 25 years old in 5 years would be 1036 vessels (105.6 million DWT), of which VLCC would be 200 vessels (59.1 million DWT). It seems that the yearly average volume for scrapping of tanker would be approximately 15 million DWT.
2) Scrapping Volume of Bulker
Since the sea accident had occurred many times from late 1980's to the mid of 1990's, a requirement for the remodeling accelerates those scrapping in spite of no compulsory regulation for the double hull structure that was imposed on the crude oil carrier with the age of over 25 years. According to Bulk Carrier Register by Clarkson, the number of bulker with over 10,000 DWT in 1997 January was 5,174 (about 242 million DWT). A large bulker over 80,000 DWT out of 5,174 was 460 (about 67.8 million DWT). If the bulk carrier (bulker) with the age of 25 year assumes to be a first-reserve for scrapping, the bulker that will turn 25 years old in 5 years until 2002 would be 1,784 vessels (about 62.7 million DWT). The buiker over 80,000 DWT out of 1,784 is 74 vessels (8.6 million DWT). However an axial fignre of scrapping of bulker would be approximately 5 million DWT per year.
3) Forecasted total scrapping volume until 2002
As a result of above discussions, a forecasted total scrapping volume including a tanker, bulker, general cargo vessel and fishing ship every year in 5 years until 2002 would be expected as 10 to 16 million GT.
2.3.3 Conclusion of Demand for Scrapping Vessels
As stated above, it is concluded that the forecasted yearly scrapping volume in 5 years until 2002 would be 10 to 16 million GT. On the contrary, as the capacity of ship scrapping is depend on the one of three principal countries such as India, Pakistan and China. These countries have some domestic problems affecting the ship scrapping capacity.
Re-rolled round bar for the construction market produced by the scrapped ship material was banned in 1995 because of its unstable strength. Furthermore, the price of scrapping ship was kept at the high level of around 200 $/LDT and the government imposed the import duty of 3 to 6% and VAT of 3%. These heavy duty made China withdraw from the ship scrapping business. If scrapping price would become around 120 to 100 $/LDT, China may re-start the business.