Critical juncture for sales and purchases now
News | Published Thursday, July 22, 2021 9:37 AM
Reported by MARINE ONLINE
Shortage of equipment seemed to have slammed brakes on vessel scrapping
Port congestion and pressing deadlines are making carriers boost their capacities to cater to the consignments. As a result, carriers are looking to acquire any vessels that help them close the demand gap.
Shipowners’ market now
Heightened steel prices should encourage demolition but the opposite happened. Shipowners are struggling to meet consignment deadlines – seemingly declaring “demolition can wait”. Despite a 30 per cent hike in prices for scrap, just 1,300 teu of tonnage was reportedly sold for demolition in the past 60 days as operators seek out and deploy any seaworthy vessel.
Industry consultant, Alphaliner commented “The booming chartering market with historically high rates, has been instrumental in keeping owners away from the demolition scene.” Shipowners appear to be putting off the offers from scrapyards (now) and prefer to milk the current cash cow. The peculiar trend instead is shipowners are frantically picking up vessels regardless of age and the prices are far better than that from scrapping.
Scrapping can wait
Alphaliner found 15 vessels amounting to 12,431 teu, were dispatched to the recycling yards in H1 21. This is worlds apart from the 56 vessels at 143,000 teu scrapped in H1 20. The consultant expects H2 21 to not deviate far in the face of a robust chartering market, and vessel values would be climbing since the demand is prevalent.
Vesselsvalue data revealed the scrap and market value of a panamax ship early 2021 was about $9 million. Today’s demolition value has increased to around $12 million, while the market value for even an elderly ship has skyrocketed to an earth-shaking $50 million, and counting! Shipowners are now ruling the market as charterers desperately find vessels for their consignments. Marine Online has an extensive network of available vessels for both sales and purchase, as well as chartering at competitive rates.
Marine Online Media Team
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