[snakeoil]

This is another result of the global slowdown.

Zombie ships set sail

"What is damaging shipping is a zombie fleet, which accepts freight at maverick prices just to keep going," Kidwell said.

A zombie ship is one that can just about repay interest on its debts but has no hope of repaying the capital.

The situation might be about to get a lot worse for loans to the shipping industry. The calculation of loan repayments and the rate of interest depend on the historic residual value of the ship at the end of the life of the loan.

Kidwell said a five-year-old Capesize vessel was sold for $19 million in recent weeks, 40% below the normal listing price for a vessel that age of about $33 million, and less than half the $48 million cost of a new ship. The scrap value of ships has also plummeted as China pumps new steel onto world markets.

The collapse in prices for secondhand vessels will blow a hole in the balance sheet of any bank or individual that is sitting on those loans.

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A followup to the Rena.

The stern of a cargo ship off the coast of New Zealand which has been stranded for six months finally sank Tuesday.

Battered repeatedly by powerful 40-foot waves, the rear section of the Greek-owned Rena broke off three months ago near Tauranga.

“The Bay of Plenty and Coromandel communities are advised that the sinking of the stern section will likely result in the loss of more debris and small amounts of oil into the sea, which may then come ashore," Maritime New Zealand said.

About 11 containers, along with debris and oil, have reportedly washed up on shore.

The ruptured vessel has spilled hundreds of cargo containers, as well as tons of fuel and oil, into the Bay of Plenty since a storm in October left it stranded, authorities said.

The containers held timber, wool, bales of recycled plastic and bags of milk powder.

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