Scrap yard boom hits record high, heading for 200,000 TEU in 2009

SHRINKING cargo volumes for older containerships has resulted in more tonnage than ever heading for scrap yards during the first four months of 2009, reports Paris-based Alphaliner News.

Fifty-two cellular ships of 91,000 TEU have been removed from the global fleet, said Alphaliner, which expects scrapping will exceed 200,000 TEU for the first time in 2009 as older ships are sent for demolition as a direct result of the high number of laid-up containerships around the world.

Today's idle containership fleet stands at 511 ships, representing 1.31 million TEU against 486 ships representing 1.31 million TEU a month ago, according to Alphaliner records. The idle fleet now represents 10.3 per cent of the world's cellular fleet, said the report.

Non-operating owners' share of the idle fleet continues to increase as carriers continue to redeliver ships at expiry of charters. The fleet idle for non-operating owners account reaches 305 units representing 478,000 TEU, or 36.6 per cent of the total idle fleet, said the agency's report.

The outlook for non-operating owners remains negative as carriers continue to seek to return excess tonnage. Despite some volume recovery seen in a number of trades since March, demand growth remains insufficient to absorb the new deliveries due this year, estimated at 1.7 million TEU or 13 per cent of the fleet, Alphaliner said.

Even allowing for delivery delays and slippage, said the report, additional capacity being introduced remains significant. Scrapping is therefore a serious alternative especially as there are currently 1.05 million TEU of cellular capacity that was built before 1989.

Although the average age of ships scrapped so far this year is 28 years, there is an increasing number of younger ships being scrapped before they reach 25. With current charter rates at the lowest in 20 years, more containerships are expected to go to demolition, said the agency report.

Source: Transportweekly