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Diana Containerships Inc. (DCIXV) Message Board

  • barrygeo barrygeo May 11, 2013 5:34 PM Flag

    Scrapping to hit new record but over-supply remains

    The following cut and pasted from Alphaliner's most recent newsletter

    Containerships scrapping is expected to reach 450,000 teu this year, if the current pace continues. It would then surpass the record 381,000 teu capacity
    deleted in 2009. In the first four months of this year, 93 units for 195,000 teu
    have already been sold for demolition or de-celled, with the average age of
    scrapped ships falling to a low of 22 years compared to between 25 and 30
    years historically.

    The rise in the capacity scrapped is mainly due to the surge in the deletion of
    3,000 to 5,000 teu ships. 30 units of this size have been sold for scrap so far
    this year, including the 4,714 teu MAERSK MALACCA (built 1990) which is the
    largest containership ever to be scrapped, in teu terms (see page 3 on vessel’s
    checkered history). Her sister ship, the MAERSK MERLION, is also expected to
    be scrapped after she ends her current employment later this month.
    More units of this size are expected to be scrapped later this year, including
    four of the five C-10 ships of 4,528 teu owned by APL. These five ships
    (PRESIDENT TRUMAN series) were built in 1988 and they were the world’s first
    over-panamax containerships. The US-flagged units would be scrapped this
    summer after ending their deployment on the FE-USEC SZX service via Suez,
    which is replaced by the new CEC service that will deploy larger ships of 8,000-
    9,000 teu.

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    • (continued)

      The ongoing exodus of both panamax and early over-panamax ships
      reflects the poor short term trading prospects for these vessels. Charter rates for modern 4,200 teu panamax units stand currently at
      about $9,200/day, which is well below the long term average rate of
      $24,000/day. Older panamaxes obtain even lower rates, down to
      $6,000 in extreme cases.

      Despite the record scrapping levels, deletions still trail behind the
      delivery of new vessels. Based on Alphaliner’s records, new containership deliveries in the first four months of 2013 have reached
      496,000 teu, outpacing the capacity scrapped by a ratio of 3-to-1.
      Total deliveries in 2013 could rival the previous record of 1.57 Mteu
      delivered in 2008, even after allowance for deferrals and slippag

2.15+0.08(+3.86%)3:58 PMEST

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