Boxship demolition is expected to pick up radically as smaller vessels are sent to the beaches.

Some experts forecast that the amount of tonnage to be scrapped this year could be two or even three times higher than last year, when 48 vessels of about 90,000 teu were recycled.

But a sharp improvement in the charter market for larger containerships and a slump in demolition prices could keep a lid on the ­number of ships that are recycled.

Scrapping of containerships has been fuelled by firm demolition prices of around $460 per ldt for a 2,000-teu vessel.

Improving sentiment

The upsurge in recycling in the first six months led Bimco — which earlier this year had predicted a small amount of capacity to be demolished — to double that forecast to 200,000 teu.

Most of the units being scrapped are smaller feeder vessels of between 1,000 teu and 2,000 teu, according to Jonathan Roach, a container market analyst with Braemar ACM.

Some forecasts suggest boxship demolition could reach 290,000 teu this year. But Roach does not expect the tally to be that high, as the improving charter market for post-panamaxes will reduce the number of scrap candidates of 5,500 teu and over.

The 6,000-teu Conti Basel (ex-Hanjin Basel) is the largest boxship to have been scrapped this year Photo: Reederei NSB

Alphaliner estimates that 63 ­cellular containerships with a combined capacity of 130,700 teu have been sold for recycling so far this year, already exceeding last year’s total. It is also four times as much as in the first half of 2018, when only 16 cellular containerships ­totalling 30,160 teu were broken up.

Braemar has slightly different numbers, but the trend is the same: 70 containerships of 140,000 teu scrapped so far, which means the full-year figure will definitely pass 200,000 teu, Roach ­argued.

Nine classic panamaxes of 4,000 teu to 5,000 teu and 20 ships of 1,500 teu to 1,800 teu have been ­recycled since the beginning of the year, Alphaliner said.

The average capacity of demolished ships is 2,179 teu, up from 1,790 teu last year, according to ­Bimco.

“Only smaller ships will leave the fleet, as the larger ships are still comparatively new,” it says.

“Even though the market may stay unprofitable, sentiment, more than freight rates, has improved enough to disincentivise owners from scrapping. Even a sluggish demand outlook will not cause massive scrapping.”

The largest ship to be demolished this year was the 6,000-teu Conti Basel (ex-Hanjin Basel, built 2003), which went to Bangladeshi breakers in January for $470 per ldt.

But charter rates for ships of this size have increased by 50% this year.

Uneconomic older ships

Some observers expect IMO 2020 to trigger much greater scrapping of containerships as many older and less fuel-efficient ships are rendered uneconomic.

“The rapidly increasing move towards fitting exhaust scrubbers could force charter rates down for some ships that are not fitted with the system, potentially swelling the number of demolition candidates,” Drewry Shipping ­Consultants says.

While boxship scrapping has ­increased, the full-year tally is not expected to come close to the 2016 and 2017 figures of 654,000 teu and 413,900 teu, according to Alpha­liner.