The scrapping of container ships is unlikely be any match the record number of newbuilding set to hit the water in the coming two years, analysts believe.
The amount of boxship tonnage over 20 years old deemed potential demolition candidates adds up to just is 3.1m teu.
That pales in comparison with with around 5.1m teu of newbuilding capacity set to hit the water in 2023 and 2024 alone, according to estimates by liner shipping analyst Alphaliner.
The newbuilding tally rises to 7.3m teu including vessels due by the end of 2025, amounting to 28.3% of the existing cellular fleet.
The box market could be further skewed to oversupply as much of the tonnage continuing to trade, the analyst notes.
The most viable scrap candidates are deemed vessels over 25 years old remains small. This sector accounts for just 655,000 teu in a global container ship fleet of 25.5m teu.
The potential ‘scrapable’ tally rises by 2.5m teu if vessels over 20 years old are included. But a substantial number of those vessels are likely to continue trading, Alphaliner argued.
This includes carriers’ tonnage, and smaller vessels for which few newbuilding replacements currently exist.
Demand questions
Scrapping of younger vessels with poor designs and uneconomic consumption would help bring supply and demand in closer balance, the analyst noted.
However, the market balance may ultimately depend on the volume of cargo flow demand, as well as the impact of decarbonisation legislation.
The container ship fleet growth is projected to remain moderate in 2022 at 3.7%, according to Clarksons Research.
Supply growth is expected to accelerate to over 7% in 2023 as newbuild deliveries reach new highs, said the division of shipbroking giant Clarksons.
Deliveries could reach another new peak of 2.5m in 2024, with fleet growth projected to remain firm at 6%, the shipbroker adds.
Currently, the average age of the container fleet is just under 14 years, added Alphaliner.
The oldest ships fall in the 500 to 999 teu segment with an average age of just under 17 years, where there is little or no newbuilding activity.
There is “zero” potential for scrapping of boxships of between 12,000 to 24,000 teu, as these have an average age of between four to seven years.
