Container Ship Scrapping Heads for Record:

A record number of container ships, including increasingly younger vessels, is set to be scrapped this year, but this won’t reduce the current oversupply of vessels, according to industry analyst Alphaliner.

Scrapping is likely to reach 450,000 20-foot-equivalent units if the current pace of demolition continues, surpassing the record 381,000 TEUs removed from the world fleet in 2009.

In the first four months of 2013, ships totaling 195,000 TEUs have been scrapped or de-celled. The average age of such ships has fallen to a low of 22 years, compared with 25 to 30 years historically.

The surging scrapping rate is largely attributable to an increase in the number of 3,000- to 5,000-TEU vessels being sold to breakers’ yards, with 30 ships of this size sold for scrap so far this year, including the 4,714-TEU 1990-built Maersk Malacca, the biggest container vessel to be scrapped in capacity terms.

The Maersk Malacca’s sister ship, Maersk Merlion, is also due to be scrapped when she comes off charter later this month.

Trading prospects are expected to remain poor, with the 3,000- to 5,000-TEU Panamax sector the weakest segment because of oversupply as shipowners opt for larger post-Panamax tonnage.

Five 4,528-TEU ships owned by APL also are set to be scrapped in the summer after ending their deployment on the Far East-U.S. East Coast service via the Suez Canal. They will be replaced by larger 8,000- to 9,000-TEU vessels.

Despite the record scrapping rates, the total capacity due to be deleted from the world fleet still trails deliveries of new ships by a ratio of 1:3, Alphaliner said.

Source: JOC. 7 May 2013

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