[251216.EN.BIZ] Box Ship Scrapping Rises in 2016 to 700,000 TEU, Panamaxes First To Go

THE number of containerships scrapped this year - as of December 20 - stands at 201 accounting for 700,000 slots, according to London shipbroker Braemar ACM, a dramatic increase compared to 187,500 TEU for the whole of 2015.

This rapid acceleration in containership demolition - particularly of panamax vessels, whose book values plummeted by 60 per cent this year to be on par with scrap value - has helped to slowdown the rise of the idle tonnage fleet, reported London's Loadstar.

The number of box ship in hot or cold lay-up by December 12 had dropped to 336 from 357 vessels two weeks previously, according to Alphaliner.

The drop was not only due to scrapping, but also to an increase in charter activity in the 1,000-3,000 TEU sizes, where there has been a dearth of newbuild deliveries in the past few years.

Nevertheless, at 1.4 million TEU the number of redundant container slots still remains higher than in the 2008/2009 during global financial crisis, and represents 7.1 per cent of the world's containership fleet.

Meanwhile, the bankruptcy of Hanjin Shipping continues to impact the larger ship sizes, with 51 vessels of 7,500 TEU and above in lay-up. Alphaliner reported that 34 ships previously operated by Hanjin, ranging from 7,000 TEU to 13,000 TEU, are idle, a figure which includes 28 vessels that have been redelivered to, or recovered by, their owners.

Until next April, when the Ocean and THE Alliance vessel-sharing groups formally commence operation, "prospects remain dim" for the largest ship sizes, said the analyst. However, it does expect a "spur in chartering activity" as the new alliances bed in.

Source : HKSG.