The
containership demolition market has started this year as it ended the last –
with an abundance of candidates looking to take advantage of robust scrapping
rates.
According to
the latest report from shipbroker Braemar ACM, 35 container vessels, equating
to 119,500 teu, have been scrapped in 2017 already; there were just nine,
27,000 teu, by the same time last year.
2016 was a
record for containership demolition. Braemar estimates 658,000 teu scrapped,
although previous reports have suggested that the figure was nearer to 700,000
teu.
The Indian
government’s decision in November to ban the use of the country’s most widely
used banknotes in a crackdown on corruption could have had some impact on what
is a cash-based industry, causing delays to transactions.
Last year
also saw the youngest containership ever to be sent to a breakers’ yard for
demolition. The seven-year-old, 2009-built, 4,250 teu classic panamax India Rickmers
arrived at a ship-breaking yard at Alang, India on 31 December.
It was
reportedly sold at $305/LDT (light displacement tonnage), but there is some
evidence of a firming of rates recently, which will encourage owners of
redundant container tonnage to look at the scrapping option.
Indeed,
Braemar reports that the 4,500 teu Al Enterprise, built in 2003, was sold last
week in Davao (Philippines) for $336/LDT, with sufficient bunkers to reach the
Indian subcontinent.
And 2016 was
a disastrous year for the charter market, especially for the panamax sector of
4,000-5,100 teu, with ship values plunging some 60% over the year as a
consequence of extremely weak demand.
By the end
of December, hire rates for panamax ships that could find charters were down to
some $4,000 a day – a figure below vessel operating levels, even before finance
costs are taken into account.
Notwithstanding
the 52 panamax ships scrapped in 2016, according to Alphaliner, 88 more were
idled as at 31 December, with 37 of these in long-term lay-up in Asia, eyeing
scrapping as seemingly the only viable option.
Meanwhile,
Alphaliner reports, flexible charters now “reign supreme” with time periods of
one-to-six months and two-to-12 months becoming the norm in many containership
sectors.
As a
consequence, ocean carriers are phasing-out many of their long-term fixed-rate
charters and returning these ships to owners, as and when newbuilds are
delivered, and or picking up replacement ships at much cheaper rates on more
flexible terms.
While the
market remains over-tonnaged, the non-operating owners of containerships are at
a greater risk than carriers, which are in a more flexible position than
hitherto to adjust supply to demand.
Source:
the
loadstar. 17 January 2017
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