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Record ship scrapping in 2016, but oversupply will persist: Drewry

A RECORD 150 container vessels are expected to be scrapped this year but it will not be enough for an industry battling overcapacity, low demand and falling rates, Reuters reported quoting consultancy firm Drewry.

Record ship scrapping in 2016, but oversupply will persist: Drewry

A RECORD 150 container vessels are expected to be scrapped this year but it will not be enough for an industry battling overcapacity, low demand and falling rates, Reuters reported quoting consultancy firm Drewry.

Record ship scrapping in 2016, but oversupply will persist: Drewry
20 July 2016 - 19:41

Record ship scrapping in 2016, but oversupply will persist: Drewry
A RECORD 150 container vessels are expected to be scrapped this year but it will not be enough for an industry battling overcapacity, low demand and falling rates, Reuters reported quoting consultancy firm Drewry.
Demolitions are expected to reach 450,000 TEU in 2016 and based on an average size of 3,000 TEU for ships which are being scrapped, this means that about 150 mainly old and medium-sized container ships will be pulled out of the market.
In 2015, demolitions were less than half of the expected 2016 level but it will not be a real relief for the struggling container shipping industry.
"This will only make a dent into the overcapacity built during the 2010-15 period," Drewry said.
The world's largest container shipping company, Maersk Line, a unit in conglomerate AP Moller-Maersk, said in February it would scrap more vessels and therefore begin to use four shipyards along India's Alang beaches to handle it.
Container vessels are normally in service, depreciating, over 25 years but some owners have pulled ships only 15 years old because freight rates have been on loss-making levels.
Owners of older container vessels can choose between chartering out ships at historically low and loss-making levels, or paying for idling costs until any market recovery - or simply scrapping the vessels, Drewry said.

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