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Box ship demolition increases, but scrap prices have fallen 25pc this year

CONTAINERSHIP demolition sales have picked up, but scrap prices have fallen 25 per cent this year, reports London's Loadstar

22 July 2020 - 19:00

CONTAINERSHIP demolition sales have picked up, but scrap prices have fallen 25 per cent this year, reports London's Loadstar.

With the containership charter market in the doldrums, demolition sales have picked up, with reports of a number of vessel sales.



Among them is the 1998-built 9,600 TEU Sine Maersk, which has been sold to Turkish breakers and will become the largest containership ever sent for recycling.



But sellers have to adjust price expectations to make deals. Recent demolition sales by Evergreen and Yang Ming have only achieved around US$280/Ldt, more than 25 per cent below the market level at the beginning of the year.



The online service lists the vessel as having a current scrap value of US$11.7 million from the $150 million 2006 peak. According to vesselsvalue.com, the post-panamax ship has been at anchor off Aliaga, Turkey, since June 29 and is due to be handed over to buyers for an undisclosed price.



Alphaliner notes that Maersk is likely to receive about $100/Ldt less scrapping the ship at a Turkish yard than the carrier could have obtained in the Indian subcontinent.



Maersk ballasted the ship from Oman to Turkey via the Suez Canal to honour its commitment to sustainable vessel recycling, in accordance with the Basel Convention and EU Ship Recycling Regulation.



The Sine Maersk was built at the group's Odense shipyard in Denmark and was subsequently lengthened, including raising its deck house bridge, in 2011 to boost its container intake by 2,200 TEU.



Alphaliner said two Costamare sister ships, the 7,403 TEU ex Katrine Maersk and Kirsten Maersk, had recently arrived in India for breaking.



As at June 22, there were 66 containerships of 7,500 TEU to 12,500 TEU in lay-up, along with 49 of more than 12,500 TEU, said Alphaliner.



A broker source told The Loadstar that, given the expected ongoing weak demand and the depressed charter market, a number of 10,000 TEU ships would be candidates for scrapping.



'I think carriers will be looking to improve their balance sheets with some demo sales, and the non-operating owners will just want to get the best deal possible, wash their face and walk away,' he said.



According to London broker Braemar ACM, over the past 30 days there have been 18 container vessels, with a capacity of 58,500 TEU, sold for demolition, while the total demolished so far this year has reached 38 vessels for 90,000 TEU.



While this is below the 74 ships of 145,500 TEU, scrapped during the same period of 2019, it reflects the impact of the Covic-19 impact on the demolition market. But amount of container tonnage recycled this year is likely to exceed last year's total of 100 ships of 195,500 TEU.


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