An estimated 1.69 million TEUs of vessel capacity is expected to be delivered in the coming year, more than twice the amount projected to be sold for scrap, according to a recent report from maritime shipping analyst Alphaliner.
Source: Frederic Muller / Shutterstock
Alphaliner estimates a total of 1.69 million TEUs in vessel capacity will be delivered in 2017, more than twice the amount projected to be sold for scrap
Delivery of newbuild containerships is expected to continue its breakneck pace in 2017, according to a recent report from maritime shipping analyst Alphaliner.
The firm estimates a total of 1.69 million TEUs in vessel capacity will be delivered in the coming year, more than twice the amount projected to be sold for scrap.
The latest report comes after Alphaliner projected ship scrapping to reach 750,000 TEUs in 2017, surpassing the record 655,000 TEUs sold for demolition the previous year.
According to the report, 78 percent of the expected new containership capacity will be on vessels with more than 10,000 TEUs.
“Even accounting for a potential slippage of about 250,000 TEUs, with some deliveries likely to be deferred by ship owners, the projected capacity additions would still reach 1.44 million TEUs, with net fleet growth after slippage and scrapping forecast to reach 3.4 percent this year,” the firm said.
The new deliveries are likely to exacerbate, or at the very least prolong, the rampant overcapacity throughout the container shipping industry that has put intense downward pressure on rates and seen carriers pile up massive losses in the past few years.
Increases in prices for scrapped tonnage, along with falling charter rates for containerships, has stoked fears among industry analysts that vessels whose charters are ending are worth more as scrap metal than if they were redeployed on another charter.
“Forced cascading, triggered by the incessant flow of ULCS (ultra-large containership) newbuildings, will continue to create havoc among smaller ship sizes, hampering any substantial rise in containership rates,” Alphaliner said.