Recycling of box ship slows

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The number of container ships being headed for demolition has almost halved year on year as charter rates, especially for Panamaxes, have improved substantially.

IHS Maritime's Sea-web.com data shows that year to date, 39 container ships have been recycled, almost half of the 77 container ships that were recycled during the same period in 2014.

Keyur Dave, finance chief at Singapore-based cash buyer Wirana Shipping Corporation, told IHS Maritime that he does not expect a deluge of container ships to be offered for demolition in 2015.

"Charter rates for container ships have gone up a lot and due to this, owners are not so keen to sell vessels for scrap," said Dave.

Charter rates for Panamax container ships have improved from less than USD10,000 per day to more than USD17,000, as high scrapping in 2013-14 removed a lot of tonnage from the market.

Sea-web.com indicates 187 container ships were scrapped in 2013 and 159 in 2014.

Dave expects Capesizes to account for the majority of scrapped ships in 2015, as freight rates show no sign of a sustained recovery.

BIMCO analyst Peter Sand said the demolition of container ships in 2013-14 focused on Panamax and sub-Panamax ships.

"The first peak in container scrapping came in 2009 as the financial crisis started to take effect," Sand said. "A total of 378,000 teu was scrapped that year, more than the previous 10 years put together. The two following years marked by high activity in 2009 resulted in a substantial lower scrapping of container vessels. In 2013 the wheels had turned and container scrapping reached new heights when almost 200 containerships totalling 444,000 teu were scrapped."