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High level of ship demolition continues despite low scrap prices

THE high rate of vessel demolition that started at the end of last year is continuing, with 19 containerships for a total of 58,000 TEU being scrapped in the first two months of this year; and Drewry forecasts a rising number of ships will enter the demolition derby in 2016. 

High level of ship demolition continues despite low scrap prices

THE high rate of vessel demolition that started at the end of last year is continuing, with 19 containerships for a total of 58,000 TEU being scrapped in the first two months of this year; and Drewry forecasts a rising number of ships will enter the demolition derby in 2016. 

High level of ship demolition continues despite low scrap prices
20 April 2016 - 21:35

High level of ship demolition continues despite low scrap prices
THE high rate of vessel demolition that started at the end of last year is continuing, with 19 containerships for a total of 58,000 TEU being scrapped in the first two months of this year; and Drewry forecasts a rising number of ships will enter the demolition derby in 2016. 
Of those units scrapped, 12 ships were under 20 years old and nine had a capacity of 4,000 TEU, according to data from Drewry, which pointed out that the level of scrapping escalated in the final months of last year as demand for Panamax ships waned and charter rates plummeted.
"Demolition prices remain unattractively low but many owners, particularly of the non-operating kind, have decided that with charter rates falling they are better off recouping some residual value from their assets from the scrap market," the maritime analyst noted.
Drewry said a record intake of new container ships totalling 1.7 million TEU in 2015 coincided with an unusually low scrapping total, serving to widen the supply and demand gap that has been burning carrier profits, reported IHS Media. 
The amount of scrapping halved last year with only 195,000 TEU worth of capacity removed from the world's containership fleet.

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