Low rates may force owners to scrap ships

plunge in supertanker rates to their lowest levels in at least 11 years may force owners to scrap ships and cancel orders for new ones, one of the largest operator of the carriers cautioned, Exim News Service informed.
Supertankers are making $ 4,335 a day after fuel costs for delivering the Middle East crude to Asia and the US, according to Baltic Exchange data.
The operator said that a sum of $ 12,000 was needed to cover costs, such as repairs, crew, insurance and lubricants for engines. Interest on loans takes this figure to as much as $ 32,100.
We will see scrapping happening soon, then we will see massive cancellations in the order book, the shipping company official said. I don’t think this market is going to last until 2011, he added.
Shipyards have orders for 946 oil tankers, capable of carrying a combined one billion barrels of crude. Of those, 225 are very large or ultra-large crude carriers, according to reports.
Source: Transportweekly