With average capesize earnings collapsing below $10,000 per day for the first time in more than six months, owners of ageing vessels are considering offloading their oldest ships for demolition. Several market sources indicated that one such deal has already been concluded. Golden Union, controlled by veteran Greek owner Theodore Veniamis, is said to have agreed to sell the 171,500-dwt Captain Veniamis (built 2001) for scrap. This is the oldest ship in Golden Union’s fleet of nearly 50 bulkers. London brokers reported that the Hyundai Heavy Industries-built vessel has fetched a price of $550 per ldt on an “as is” basis in Singapore. Managers at Athens-based Golden Union did not respond to a request for comment.

The Captain Veniamis would be the first capesize sold for demolition since April, when the Nicholas Moundreas Group, a Greek peer, achieved a record $715 per ldt with a scrapping deal for the 171,200-dwt Sunbeam (built 2000). This was the highest demolition price achieved by a capesize bulker since at least 1998, according to the VesselsValue deals data bank. The price gap between the Sunbeam and the Captain Veniamis is indicative of the demolition market’s travails over the past few months when a limited quantity of vessels headed for scrapping amid robust bulker rates.

Bulker earnings, however, have been sliding for several weeks. With average capesize rates dropping below $10,000 per day last week, some owners seem tempted to pull the scrapping trigger. “We’re seeing a positive trend in the demolition market over the past five days,” said Yiannis Kourkoulis, Piraeus-based vice president of purchase at cash buyer Best Oasis Ltd. Broker queries for scrapping deals have increased. The interest seems to be matched by interest from scrapyards.

Vessels due for delivery in the Indian subcontinent could reach prices of up to $590 per ldt, according to Kourkoulis. These are still hefty levels, considering overall market conditions and funding difficulties that scrapping players have been facing in the subcontinent recently. Some cash buyers and end-buyers seem nevertheless prepared to pay such prices to get the market moving again. Still, some capesize scrap talk seems to be premature. London brokers are reporting that Moundreas has agreed to sell another capesize, the 172,600-dwt Sunlight (built 2000), at $547 per ldt. Market sources in Athens, however, said the Sunlight has not been sold.

Clarksons, one of the first brokers to report the Captain Veniamis deal, poured cold water on talk that the bulker recycling market is surely heading towards revival. Yards in India remain the only realistic demolition option in the subcontinent for owners of larger vessels, due to issues with the issuing of letters of credit in Bangladesh and Pakistan, Clarksons said in its latest weekly report. Some market observers even doubt that the Captain Veniamis constitutes a recycling sale and suspect that it may potentially go on for further trading, the brokerage added.