May 26, 2006

Old ship sinking accidents may raise age concerns

By Edgar Ang

NEW YORK (Reuters) - A string of ship sinking accidents
involving old bulk carriers in the past several months may
attract attention from the International Maritime Organization,
shipowners and brokers said on Friday.

A 30-year-old cement carrier, Portland, sank on Thursday
between Canary Island and Tenerife off the coast of Spain, with
two of the 11 crew members still missing as of late Friday,
said an official from Tenerife maritime rescue group.

This follows the sinking of 17-year-old Alexandros T off
the coast of South Africa in early May. The ship was
transporting 155,000 tonnes of iron ore when it sank.

A cement carrier Margaret sank off the coast of Italy last
December during a storm.

Apart from crew safety and potential oil spills, the
sinking of older ships could have a bearish impact on freight
rates for veteran ships, brokers said.

"Cement carriers may be more susceptible to sinking because
of the vessel age," a shipowner in Brazil said, adding that
there was a strong vessel traffic flow of cement carriers from
Spain to the United States. Spain is the largest cement
producer in Europe.

"They are usually older ships of more than 20-25 years, and
they are converted from bulk carriers," he said.

Unlike the oil tanker market, dry bulk carrier owners do
not face strict phase-out dates for old ships and single-hulled
vessels, ship brokers said.

The newer ships tend to ply the U.S. and Canadian routes
due to the stricter regulations, and the older ships are in the
India, China and Southeast Asia, they said.

"When the freight rates are strong, shipowners prefer to
leave their ships in the market longer than sending them to the
scrap yards," a broker said.

However, some industry experts believed old ships could
stay seaworthy if properly maintained, he said.

Intertanko, an association for oil and chemical tanker
owners, has maintained that a single-hulled ship, properly
maintained, gives as much protection against oil spills as a
double-hulled ship.

IMO officials in London were unavailable for comment late
on Friday.