Boxship scrappings slow as outlook brightens

However, although the level of scrapping is still relatively high, the rate of deletions

is diminishing due to improved employment prospects and as the fleet has been purged of most over-aged units which are the prime candidates for scrapping. This follows the record of 208 vessels for 380,000 TEU that were scrapped in 2009.

The bulk of the 101,500 TEU capacity deleted so far in 2010 results from the scrapping of 53 cellular ships representing 91,700 TEU and of the conversions of seven cellular ships, representing 9,800 TEU, into other vessel types. Most of these latter ships have been de-celled and will probably never revert to the container business.

The scrapping rate will likely reduce further in the coming months as the summer peak season could boost demand for idle ships, in spite of the influx of new capacity expected during the period. This contrasts with last year’s situation, when scrapping peaked in July 2009 in what should have been the traditional peak season.

The idle fleet has already dropped to a 15-month-low with only 5.3% of the fleet idle, down from a high of 11.7% recorded in December 2009. Charter rates have also shown encouraging signs of recovery although the rate increases have been largely focused on the larger vessel segments.

Alphaliner has also identified another 25 cellular ships that are currently employed on pure breakbulk trades, carrying steel, windmill equipment and other breakbulk cargoes. A few small units have even been temporarily de-celled in this respect. Cellular ships employed as

breakbulk carriers command rates which are currently 10-30% higher that what could be expected on container trades. These 25 ships are expected to revert to the containership business as soon as their current commitments end.