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Scrapping fund could put VLCC rates back at 2008 level

The creation of a scrapping fund for VLCCs, as proposed by Frontline, could reduce the amount of tonnage by ten percent, bringing the rates back at 2008 levels, according to analysts McQuilling.

Frontline's suggestion of scrapping the oldest VLCCs in the market through a common scrapping fund supported by tanker carriers could become a game changer for the struggling market for large supertankers, according to McQuilling.

Yesterday, Thursday, Frontline CEO Jens Martin Jensen suggested to ShippingWatch that the industry could establish a joint scrapping fund offering a financial incentive for carriers to scrap their oldest ships. Removing the approximately 70 ships that are more than 15 years old would bring balance back to the market, he said.

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