Scrapping smaller ships slows, charter market says small is beautiful
SCRAPPING has slowed exponentially in the smaller box ship segment with only 12 recycled this year compared to 70 in the same period in 2017, reports London's Loadstar
SCRAPPING has slowed exponentially in the smaller box ship segment with only 12 recycled this year compared to 70 in the same period in 2017, reports London's Loadstar.
This has been attributed to a rejuvenated charter market and that has been reactivated demand for laid-up tonnage, long ignored in the rush to build mega ships.
Alphaliner said it was adjusting its full-year scrapping estimate to 200,000 TEU from 654,862 TEU for 2018, compared to 654,862 TEU in 2017, while conceding its final figure could be as low as 100,000 TEU to 200,000 TEU.
Alphaliner has seen its idle fleet chart fall to fewer than 100 ships for 340,000 TEU from a record high of 1.6 million TEU in October 2016 as demand for the smaller vessels in particular has driven daily hire rates, on average, 40 per cent higher than 12 months ago.
Shipowners that had previously consigned ships to lay-up against a background of sub-economic rates are now reviewing their strategy and, despite the fact that scrapping rates have jumped to around $500 per long ton, are opting instead to reactivate and fully crew their ships to take up attractive new fixture offers.
Alphaliner notes that over one million TEU in ultra-large containership capacity is slated for delivery this year, which, along with reduced scrapping, could push annual capacity growth up to six per cent.
Meanwhile, the top-heavy growth in container tonnage is causing overcapacity concerns in the ULCV sector.
Loadstar has also heard anecdotal reports of tumbling load factors on the Asia-North Europe trade, with spot rates weakening daily.