From the Atlantic Frontier

Fings ain’t what they used to be and no mistake guvnor. Young container ships going off to the great boatyard in the sky and freight rates at laughably low levels. Who’d be a shipowner eh? Worse, who’d be a sailor? Oooh!

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The following filched from g Captain

By Mike Wackett

(The Loadstar) – The number of container vessels sent to breakers’ yards so far this year will shortly eclipse the total demolished in 2015 – in terms of teu capacity, 2016 is already way ahead.

According to the latest data from shipbroker Braemar ACM, the year-to-date figure is 72 vessels, 243,000 teu, compared with 85 vessels for 187,500 teu in the whole of last year.


The surge in vessels sold for scrap – 19 container vessels reported this month alone – has helped to lower the idle tonnage fleet, notes industry consultant Alphaliner.

It said the number of ships in lay-up had fallen by 28% in teu terms since early March, and as at 16 May stood at 269 vessels for 1.13m teu.

Alphaliner estimates that the full-year scrapping figure will exceed 450,000 teu – almost 2.5 times more than last year.This is partly due to a pick-up in scrap rates – over $300 per ldt is now being achieved, compared with low $200s at certain points last year – as well as the industry’s need for a clear-out of unemployable panamax ships ahead of the opening of the expanded Panama Canal next month.

According to the data, of the 19 ships sold for scrap this month, five were panamax units of 4,200-4,800 teu and four were over-panamax vessels of 5,300-6,500 teu.

Notwithstanding the slim chance of employment for panamax ships – according to one German broker there are at least 50 seeking employment at any one time – daily hire rates for fixtures are grim.

For example, rates for a 4,400 teu gearless panamax ship of $5,400 per day, are a staggering 63% below the market rates of a year ago, and in many cases are below the daily operating cost.

It follows that ocean carriers needing to charter for a short period are able to take full advantage of the extremely weak market and can dictate their own terms. MSC, CMA CGM and Zim remain very active in the charter market and fixed several panamax ships in May at below $5,000 a day on flexible short terms with long options.

Thus the inducement for a shipowner to send his redundant panamax and post-panamax containerships onto the beaches of India, Pakistan and Bangladesh – where over 70% of all global vessels are scrapped – has never been greater.

The current scrapping momentum is also bringing down the age that ships are sent for demolition, and so-called “teenagers” are now prime scrapping candidates.

According to Craig Jallal from vesselsvalue.com, the average scrapping age of all containerships during 2014 and 2015 was 22 years, and the average age for a post-panamax vessel was 19.5 years.

In April, it reported that the 2002-built, 5,447 teu Conti Taipei had been sold for scrap. And this month, two 2002-built ships have been sold to breakers, the 5,600 teu Conti Helsinki and the 3,500 teu Gold.

There is little doubt that the demolition list will grow and the age of scrapped ships will fall further after the opening of the Panama Canal’s new locks on 26 June.

Pictured below, a bloke on watch on a ship not going to the Panama Canal. Instead southbound towing the S7000 to a R/V with some stuff off Point Noire in 1997.

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About allatsea

Sixty year old master-mariner. Absolutely gorgeous. Well wedged.....when compared to a Nairobi street urchin. Sorted, in that I haven't been in court recently. Hopelessly optimistic, terminally disappointed. Good with cats and other fluffy things. No musical talent. Generous to a fault provided it's someone else's round. Political centreist with far right and left viewpoints. A green activist from the hydrocarbon position with nuclear leanings. Averse to avarice but always happy to receive lottery wins, gifts, windfalls, legacies, prizes and wet sloppy kisses.
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