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Credit: MSI Credit: MSI The OSV sector will be reliant on a hitherto unseen amount of scrapping to balance the market, writes Gregory Brown, Associate Director – Offshore, Maritime Strategies International There is a consensus that an OSV market recovery will only be driven a supply side rationalization. As well as a lack of newbuild activity, that rationalization will have to include unprecedented levels of scrapping in a market which has historically witnessed only limited levels of attrition. That limited level of attrition has several deep-seated roots, most notably weak scrap values, a fragmented supply chain, and low idle costs (~ $1,000/day). These fundamentals are unlikely to change. Scrap prices are likely to remain weak, the fleet will remain fragmented, and OSVs will continue to be unattractive for scrap yards.

Kim hengHai duongGregory brownGlobal researchMaritime strategies internationalCredit suisse european oilfield services equity researchUniversity of surrey school managementMaritime strategies international creditSociety of petroleum engineersAssociation of surreyAssociate directorMaritime strategiesHanks tideDulaca tideBaltic marineHudson offshore