Scrapping teenage the breakers would solve overcapacity if it were for steel glut
Time：2016-01-20
Browse：75
Ninety-three container vessels were scrapped last year, removing 213,000 TEU of old tonnage from the global fleet, but this was only half the tonnage represented sold for scrap in the two previous years.
More than 214 containerships, totalling 1.72 million TEU were launched last year, expanding the global fleet by 8.5 per cent.
Asian shipyards have bulging orderbooks, including no less than sixty 18,000-22,000 TEU ultra-large boxships.
This aggressive ordering over the past few years by carriers has been the root cause of chronic overcapacity issues on many tradelanes, despite the slowdown in trades that can temporarily throw supply / demand out of kilter.
The average age of containerships scrapped last year was 23; but it is the `teenagers" that need to be removed from fleets if the container liner industry is to overcome the current overcapacity crisis and potential looming disasters, said the report.
One obstacle is the slump in global steel prices. In 2014, owners were obtaining up to US$500 per light displacement ton (ldt) for scrapping ships, this figure had dropped to below $300 by the end of last year.
Markets around the world continue to be impacted by the flood of cheap steel from China, the domestic surplus a consequence of its slowing economy.