Containership Scrappage Rates to Break Previous Records

Containership scrappage rates are expected to exceed previous records this year, but cellular capacity removed due to demolition will still be surpassed by a ratio of one to three by newbuilding deliveries, reported Lloyd’s List citing Alphaliner.

If the current recycling trend of boxships continues, the total capacity consigned to breakers’ yards in 2013 could reach 450,000 teu – exceeding the previous record of 381,000 teu set in 2009. This acceleration in scrapping is mainly attributed to the rush to remove redundant panamax ships where charter hire rates for a 4,200 teu unit are at depressed levels, averaging below $10,000 per day.

This compares to a 12 – year average of $24,000 per day and a January 2005 peak of almost $45,000 per day, Alphaliner said. Moreover, the average age for scrapping of containerships has fallen to 22 years, versus the historical level of 25 to 30 years, but there is also an increase in the number of so – called ‘ teenagers ’, ships under 20 years, being sold for scrap, Alphaliner explained.

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IMDO, May 10, 2013