SM Line continues to hive off boxships.
The South Korean operator has sent a pair of older handysize containerships to the breakers.
The 1,641-teu SM Hochiminh (built 1998) and 1,620-teu SM Bangkok (built 1999) have been sold to cash buyers GMS for an en-bloc price of just over $6m, brokers said.
Cash buyers
The price is deemed relatively firm given a sharp fall in demolition prices.
The deal includes options on where and when the vessels can be delivered in the sub-continent.
The two vessels are said to have been sold for a price of around $445 per ldt.
That is down on around $470 per ldt that containerships like the 2,205-teu Spirit of Colombo (built 2000) fetched in late May.
But a steep drop in the steel plate price in India has dragged the demolition price down by around $35 per ldt in recent weeks.
Meanwhile, the demolition markets of Pakistan, Bangladesh and Turkey are also under pressure.
That means the market for containerships has fallen to around $420 to $430 per ldt, said demolition brokers.
Some experts forecast that the amount of tonnage to be scrapped could be two or three times higher than last year, when 48 vessels of about 90,000 teu were scrapped
Boxship scrapping has picked up radically this year as smaller containership suffer from a depressed market.
Changing ownership
Some experts forecast that the amount of tonnage to be scrapped could be two or three times higher than last year, when 48 vessels of about 90,000 teu were scrapped.
But a sharp pick up in the charter market for larger containerships and a slump in demolition prices could keep a lid on the number that are recycled.
SM Line acquired the SM Hochiminh and SM Bangkok from the German market in early 2017 at scrap related price of around $6.6m en-bloc.
More recently, other larger containerships in its fleet have been changing ownership including three large neopanamaxes sold to a Chinese leasing company in a $100m deal.
The 8,586-teu SM New York (built 2010), SM Norfolk and SM Savannah (both built 2011) are understood to have been bought by China’s International Far Eastern Leasing Co of China Ltd for around $33m per vessel.
The transaction is understood to include a five-year charter to Maersk Line from the second quarter of 2020 at $19,000 per day – that is significantly below current spot market rates.
SM Line is the liner arm of Samra Midas Group, which also owns Korea Line Corp and Korea Shipping Corp, formerly Samsun Logix.
It was established in 2017 and operates 18 containerships on intra-Asian and transpacific services.
Many of the vessels it owns or operates were formerly part of the fleet of bankrupt Korean operator Hanjin Shipping.
