Introduction to Vessel Deconstruction

Learn about Vessel Deconstruction, from YieldStreet Investment Associate Matt Klopfer.

Did you know that the raw materials used to build a vessel can sometimes be worth more than the ship itself. At the end of a vessel’s life, when repair and upkeep render a vessel uneconomical to operate, the vessel can be sold for the value of its raw materials which is primarily steel. This dynamic creates exciting investment opportunities related to a vessel’s deconstruction. Beyond providing recycled steel to emerging economies, deconstruction plays a crucial role in balancing the global vessel fleet.  So here’s how it works: When a ship owner decides to sell a vessel for demolition, he or she will put that vessel up for sale.  Then companies that specialize in acquiring vessels for deconstruction, will bid on that vessel.  Once a purchase price is agreed upon, the buyer will either deconstruct the vessel themselves or more often, sell the vessel to a company that will recycle it for them.  YieldStreet’s role is to provide capital to the company acquiring the vessel for deconstruction thus creating an investment opportunity for the YieldStreet investor community.  

Published:

05/29/2018

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