14 September 2015

Containership scrapping slows down to a trickle:

The total capacity of containerships scrapped from January to August this year has fallen to only 95,000 teu, compared to 323,000 teu in the corresponding period of 2014. Only 54 cellular containerships have been scrapped so far this year, with an average size of 1,765 teu and average age of 23 years. By contrast, a total of 130 ships were scrapped in the first eight months of last year, with an average size of 2,505 teu at 22 years.

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Steady demand in the second hand market has saved some of the older ships from the breaking yard. This includes tonnage initially intended to be sold to scrap buyers, but eventually acquired for further trading, taking advantage of the mini-recovery in the charter market earlier this year. In June, one such ship, the 1,055 teu CAPE SOUNION (built 1996), was even resold by a scrap buyer who had purchased her in December last year.

Despite earlier plans to recycle the ship, the vessel was subsequently retained for further trading before she was acquired by MSC. The fall in scrapping figures is also related to tumbling scrap prices, down from a high of $500 per light displacement ton (ldt) last year to only $320/ldt currently, while average charter rates are 30% higher so far this year. Illustrating this trend, of the 16 Hapag-Lloyd containerships (dubbed ‘Old Ladies’) that the company announced it was planning to dispose earlier this year, only five were actually sold for scrap.

The remaining 11 vessels were acquired for further trading. This included nine units aged 20 years or more, reflecting the continued market demand for older tonnage.

Source: Hellenic shipping news. 10 September 2015

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