The principal reason that number of scrapping vessels had increased in 1980's was due to the increase of number of surplus vessels and the price fall of scrapping vessels. However, after 1986, a demand increase for cargo transporting at sea made the market price of transportation by vessels higher and led the price of scrapping vessels higher. The owner of vessels tried to keep vessels utilizing as long as possible and to stop scrapping the old vessels. Eventually the price of scrapping vessels jumped, especially 265 $/LDT in 1989. Naturally, the number of vessels scrapped dropped drastically.
It is realized by the trend in Fig.2.3.1 that when the price of scrapping ship raised higher than 150 $/LDT, the amount of scrapping would decrease and when lower than 150 $/LDT, the amount of scrapping ship would increase. Furthermore, the reason why the amount of ship scrapping increased a little in spite of high level price of 195 $/LDT was that a factor facilitating the ship scrapping such as international treaty and regulation for discriminating the overage ship. According to the Japanese newspaper on the Maritime Affairs on 2nd March 1998, the world scrapping capacity is falling because of the strengthened regulation against the gas explosion of scrapping tanker in India, where the share of volume of vessels scrapped is approximately 50%. This drop of ship scrapping capacity and the increase of necessity for scrapping the old tanker led the price of scrapping vessels lower down to approximately 150 to 130 $/LDT. In case the price of scrapping vessel could be kept at around 130 $/LDT, China may restart the scrapping business and increase the world scrapping capacity.
