A record 300,000 TEUs of container ship capacity is set to be scrapped this year as ocean carriers and charter ship owners face a growing mismatch between supply and demand for tonnage.
This is ten times more than the historical average and would be the highest level of scrapping ever recorded in liner shipping, according to Alphaliner, the Paris-based consultancy.
Ship owners assigned 94 fully cellular containerships totaling 184,700 TEUs for scrapping in the first half of the year, Alphaliner said. This is nearly as much as the total tonnage scrapped in the past five years.
Ocean carriers have been taking the lead in demolishing surplus tonnage, accounting for 107,200 TEUs of capacity sold to ship breakers, while charter owners have scrapped 77,500 TEUs.
Scrapping likely will ease during the third quarter peak shipping season. But it will pick up in the final three months of the year as nearly ten percent of the world container fleet is laid up. Deliveries of new ships, too, will swell capacity as global box traffic slows.
Six of the vessels slated for demolition are in the 4,000-4,500 TEUs range, the largest containerships ever scrapped, Alphaliner said.
Mediterranean Shipping Co., the world's second largest ocean carrier, and Mitsui OSK Lines, the Japanese ship-owner, feature heavily in recent demolition contracts, according to Clarkson, the leading London shipbroker. While MSC has disposed of a number of aging vessels, MOL is demolishing some of the youngest ships to be scrapped since the market downturn, Clarkson said.
"That 16-19 year old ships are being sold for scrap demonstrates the effect that the trade downturn is having on some boxship owners who have imminent deliveries to balance with existing idle capacity," Clarkson said.
MOL sold the 1991-built MOL Columbus to a Chinese ship breaker for $3.97 million and Indian breakers paid $4.08 million for the 1986-built MOL Liberty. Neptune Orient Lines sold the 25-year old APL Tulip to an Indian scrap yard for $1.78 million.
Ocean carriers and charter owners are expected to at least maintain current scrapping rates into 2010 when the oversupply of box ship capacity is forecast to peak at around 3.5 million TEUs.
Contact Bruce Barnard at email@example.com.