Doug Smith's questions to Star Bulk Carriers Corp (SBLK) leadership • Q1 2025
Question
Doug Smith from Everest asked about the persistently low vessel demolition rates despite fleet growth exceeding demand growth, questioned why older ships being sold are not being scrapped, and asked if environmental regulations will finally act as a catalyst for scrapping.
Answer
CEO Petros Pappas explained that scrapping remains low because vessels are still profitable. He attributed the lack of new orders, which could help balance the market, to high vessel prices and uncertainty over future fuels. He noted that the buyers of their older vessels are Chinese and may have a different return threshold. Pappas affirmed that environmental regulations will be a catalyst, not by forcing immediate scrapping, but by slowing vessel speeds and increasing off-hire time for upgrades, which will eventually render the least efficient ships unprofitable and lead to their retirement.