BIMCO: Boxship demolition at 41-month high in July

Container shipping demolition has hit a 41-month high in July reaching 52.8 thousand TEU, thereby surpassing the 50.6 thousand TEU demolished in June, data from BIMCO shows.

Illustration; Image by Navingo

In the first seven months of the year a total of 152.8 thousand TEU has been demolished, up 26.3% from last year.

16 ships have been demolished in July, including the 1998 built Sine Maersk, the largest container ship ever to be demolished at 9,600 TEU.

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The strong demolition volumes in June and July come after a very slow few months for demolition activity.

In particular, the three months between March and May saw very little activity with only 21.1 thousand TEU being removed from the market, 72.8% lower than in the same three months of 2019, BIMCO’s data shows.

This was a result of the lockdown measures in the major shipbreaking nations of the world, which saw many owners unable to send their ships to the yards.

Back in April, BIMCO revised its full-year forecast for containership demolitions from 200,000 TEU to 300,000 TEU, which would be a 63.8% increase from 2019 levels.

The change, as explained by BIMCO, reflects the current market conditions as the coronavirus crises has caused a dramatic drop in demand with container shipping demand down 7.7% in the first five months of 2020 compared to 2019.

Moving on to the supply side, the global containership orderbook, seen as a percentage of the world fleet, has dropped to a historic low point this month, continuing the declining trend of the past few years, according to Alphaliner.

As per Alphaliner’s July data, the orderbook-to-fleet ratio now stands at only 9.4% or 2.21 Mteu.

“For the first time in more than 20 years, the global newbuilding pipeline thus fell below the 10% threshold. While much of the past decade’s declining ratio was primarily a statistical side effect of an ever-growing global fleet, this has fundamentally changed in more recent years,” the maritime data provider said.