Clarkson Research Services Limited said in a report that ship demolition rose to the highest in 13 years in 2009, as owners scrapped aging vessels to make way for a record number of new ships being built.

It added that scrappers in Bangladesh, India, Pakistan and elsewhere bought 1,014 ships with a combined carrying capacity of 31.5 million deadweight tonnes. That's double the 2008 tally and the most since 1996.

According to the London based Baltic Exchange, charter rates for commodity carriers as measured by the Baltic Dry Index plunged 59% to average 2,617 points in 2009 as the global recession curtailed demand for raw materials. Crude oil tanker costs lost 62%, averaging 581 points.

Clarkson estimates that total demolitions will advance to 53.3 million tonnes this year, led by a more than fourfold increase in scrapping of oil tankers. Single hull oil carriers face trading restrictions this year under environmental rules from the International Maritime Organization.

The Clarkson data showed that the biggest component of demolition last year was commodity carriers, with 10 million tonnes of capacity removed. Oil tankers accounted for 8.4 million tonnes and the remainder was split across different vessel types.

According to Clarkson, Indian scrappers bought the most vessels for demolition at 393 ships while Bangladeshi yards accounted for the biggest slice of carrying capacity, at 10.3 million tonnes.

(Sourced from www.bloomberg.com)