With the first significant amount of boxships being put up for recycling as the container market sinks to pre-covid levels, analysts are anticipating a significant swathe of vintage tonnage to be torched in the coming weeks and months.
Wan Hai Lines of Taiwan has put 10 small boxships up for recycling and there are reports of another five ships from different companies all ready to be scrapped.
“These recycling sales in quick succession could signal the start of what could become a massive wave of containership demolitions, triggered by the looming overcapacity and the new carbon regulations expected in 2023,” Alphaliner noted in its most recent weekly report, observing that demolition of cellular container tonnage has been at an all-time low in 2022.
As well as a record orderbook set to deliver over the coming couple of years, carriers are having to contend with a significantly worsening demand environment.
“The ongoing trade slowdown is expected to worsen for 2023. While the outlook for global trade remains uncertain, negative factors appear to outweigh positive trends,” a new report from the United Nations Conference on Trade and Development (UNCTAD) warned this week.
“The market collapse is clearly continuing to intensify” Sea-Intelligence noted in its most recent weekly report, published on Sunday. “New demand data shows a market in a full state of collapse, driven by a strong desire amongst importers to reduce their inventory exposure,” analysts at the Copenhagen outfit wrote.