Ocean Carriers Plan to Double Scrapping This Year

Ocean Carriers Plan to Double Scrapping This Year

Carriers and shipowners also expect 1.4 million TEUs worth of new vessel deliveries

Ocean carriers and shipowners are set to scrap container ships totaling more than 200,000 20-foot equivalent units capacity in 2012, more than twice the capacity sent to breakers’ yards last year.

But this will be dwarfed by new vessel deliveries, which are expected to hit 1.4 million TEUs in 2012, container market analyst Alphaliner said.

So far this year 69 ships totaling 124,000 TEUs have been scrapped, compared to just 85,000 TEUs for the whole of 2011. By contrast, deliveries of new ships have already reached 621,000 TEUs.

Scrapping is expected to accelerate through the year, driven by low earnings and a weak outlook for older, less efficient vessels.

The sharply higher demolition rate will make 2012 the second highest year of scrapping behind the record-breaking 379,000 TEUs broken up in 2009, according to Alphaliner.

The average age of scrapped container ships has dropped to 26 years compared with 28 years in the past decade.

The 1999-built, 1,500 TEUs feeder ship Ocean Producer, formerly the Norasia Sultana, which was sold for demolition this month, became the youngest box ship to be scrapped, excluding vessels damaged in accidents.

The Ocean Producer was one of 10 sister ships built in Germany and China between 1998 and 2000 that were plagued by technical problems and design flaws that prevented them from performing to specification.

The problems were fixed for most of the ships and they were adapted to run at much lower speeds than originally planned.
Contact Bruce Barnard at brucebarnard47@hotmail.com.

According to: The Journal of Commerce