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Econometric analysis of the ship demolition market

Author

Listed:
  • Knapp, Sabine
  • Kumar, Shashi N.
  • Remijn, Anna Bobo

Abstract

The topic of ship recycling has obtained considerable attention during the last two decades for a variety of reasons with the likelihood of the adoption of a new international convention under the auspices of the International Maritime Organization (IMO). This study applies econometric modeling to a unique data set to provide insight into the dynamics of the ship recycling market. The data set contains information on 51,112 ships over 100Â gt and includes 748,621 events over a period of 29 years. The analysis confirms a negative relationship of earnings and a positive relationship of scrap prices for all locations while Bangladesh seems to be more sensitive to changes in earnings than the other locations and more likely demolishes larger and older vessels. The results for flag and ownership vary across scrapping locations with Malta and Cyprus indicating potential importance from a registry perspective. The overall safety profile of a vessel seems to be less important towards the probability of a ship being scrapped. Possible implementation of the convention at EU level will mostly likely affect Turkey while non-ratification of one of the major flags will most likely affect China or Bangladesh.

Suggested Citation

  • Knapp, Sabine & Kumar, Shashi N. & Remijn, Anna Bobo, 2008. "Econometric analysis of the ship demolition market," Marine Policy, Elsevier, vol. 32(6), pages 1023-1036, November.
    • Handle: RePEc:eee:marpol:v:32:y:2008:i:6:p:1023-1036
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    Citations

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    Cited by:

    1. Nikos D. Kagkarakis & Andreas G. Merikas & Anna Merika, 2016. "Modelling and forecasting the demolition market in shipping," Maritime Policy & Management, Taylor & Francis Journals, vol. 43(8), pages 1021-1035, November.
    2. Yujuico, Emmanuel, 2014. "Demandeur pays: The EU and funding improvements in South Asian ship recycling practices," Transportation Research Part A: Policy and Practice, Elsevier, vol. 67(C), pages 340-351.
    3. Papapostolou, Nikos C. & Pouliasis, Panos K. & Kyriakou, Ioannis, 2017. "Herd behavior in the drybulk market: an empirical analysis of the decision to invest in new and retire existing fleet capacity," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 104(C), pages 36-51.
    4. Thanasis Karlis & Dionysios Polemis & Anastasios Georgakis, 2016. "Ship demolition activity. An evaluation of the effect of currency exchange rates on ship scrap values," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 66(3), pages 53-70, July-Sept.
    5. Yin, Jingbo & Fan, Lixian, 2018. "Survival analysis of the world ship demolition market," Transport Policy, Elsevier, vol. 63(C), pages 141-156.
    6. Keun-Sik Park & Young-Joon Seo & A-Rom Kim & Min-Ho Ha, 2018. "Ship Acquisition of Shipping Companies by Sale & Purchase Activities for Sustainable Growth: Exploratory Fuzzy-AHP Application," Sustainability, MDPI, vol. 10(6), pages 1-13, May.
    7. Alizadeh, Amir H. & Strandenes, Siri Pettersen & Thanopoulou, Helen, 2016. "Capacity retirement in the dry bulk market: A vessel based logit model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 92(C), pages 28-42.

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