This means the annual rate of scrapping has to rise from the present level of around 25 vessels to 200 units to achieve a recovery in utilisation and dayrates by 2020, IHS Markit analyst Erik Simonsen said.
He believes players are at present not acting rationally by laying up vessels in anticipation of a market upturn due to the high costs of stacking and the deterioration in condition of laid-up units over a prolonged period.
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