Grimaldi Sells 27-Year-Old Vehicle Carrier for Recycling
Italian Ro-Ro Operator Disposes of Aging Vessel Amid Market Trends
Grimaldi Group, the renowned Italian roll-on/roll-off (ro-ro) and vehicle carrier operator, has sold its 27-year-old vessel, Repubblica Argentina, for recycling. The 51,925 gross tonnages (gt) vehicle carrier was reportedly purchased by Turkish ship recyclers for an estimated $340 per light displacement tonne (ldt). The sale marks the first vehicle carrier to be sent for scrapping since May 2024, underscoring a shifting dynamic in the global shipping industry as older vessels are being phased out.
Aging Fleet and Environmental Considerations
Built-in 1998, Repubblica Argentina had served Grimaldi’s fleet for nearly three decades, transporting vehicles and cargo across various routes. However, with increasing regulatory pressures, environmental concerns, and economic considerations, the decision to recycle the vessel aligns with broader industry trends.
The maritime sector has been steadily moving towards sustainability, with shipowners looking to replace aging ships with more energy-efficient models that meet the latest International Maritime Organization (IMO) regulations. Stricter emissions rules, especially those targeting carbon intensity and fuel efficiency, have pushed many companies to retire older, less efficient vessels.
Vehicle Carrier Recycling Market Sees First Sale in Months
Grimaldi’s sale of Repubblica Argentina is significant as it represents the first recycling of a vehicle carrier since May 2024. While bulk carriers, container ships, and tankers frequently enter the recycling market, the disposal of vehicle carriers is less common. The delay in scrapping similar vessels could be attributed to the relatively long service life of ro-ro ships and the ongoing demand for car transport in global trade.
The Turkish ship recycling market has remained a key player in vessel scrapping, with its facilities offering environmentally compliant recycling processes that adhere to EU regulations. This makes Turkey a preferred destination for shipowners looking to decommission ageing tonnage responsibly.
Broader Trends in Ship Recycling
Apart from Grimaldi’s recent sale, other vessels have also been making their way to recycling yards. One notable recent scrapping involved a medium-range Panamax tanker, reflecting a broader industry shift where older tonnage across different shipping sectors is being phased out.
As the market for second-hand vessels fluctuates, shipowners must decide whether to extend a ship’s operational life, sell it for further trading, or opt for recycling. The latter option becomes increasingly attractive when maintenance costs, regulatory compliance, and lower freight earnings make older vessels less viable for continued operations.
The Financial Side of the Deal
Grimaldi’s decision to sell Repubblica Argentina at $340 per ldt aligns with recent scrap price trends. Shipbreaking yards in Turkey and South Asia, particularly in Bangladesh, India, and Pakistan, have seen fluctuations in steel demand, impacting the price shipowners receive for their retired vessels.
The $340 per ldt rate suggests stable demand in the recycling sector, though it remains below peak levels observed in past years when steel scrap prices soared due to supply chain disruptions and construction booms. This pricing factor is crucial in determining when and where shipowners choose to dispose of ageing tonnage.
What’s Next for Grimaldi?
Grimaldi has been actively modernizing its fleet recently, investing in new, environmentally friendly vessels designed to reduce emissions and improve fuel efficiency. The company has ordered several hybrid and LNG-powered ships, aligning with global decarbonization goals.
The sale of Repubblica Argentina is expected to be part of a broader fleet renewal strategy that prioritizes sustainable operations. As new vessels enter service, Grimaldi will likely continue phasing out older units, further reducing its fleet’s environmental footprint.
The sale of Repubblica Argentina signals an ongoing shift in the maritime industry, where regulatory and environmental considerations drive ship disposal decisions. With the recycling market remaining active and shipowners facing increasing pressure to modernize fleets, more ageing vessels may soon follow suit. Grimaldi’s move sets a precedent for other vehicle carrier operators, highlighting the evolving landscape of global shipping and sustainability efforts.
