June container ship demolitions increase year-to-date volumes by 100%
During the first five months of 2020, a total of 21 ships with a 50,702 TEU of container shipping capacity left the active fleet to get demolished.
Demolition volumes set for 3-year high
As the COVID-19 pandemic quickly worsened the outlook for container shipping in 2020, BIMCO adjusted its pre-year forecast of 200,000 TEU upwards to reach 300,000 TEU for the full year.
2016 was a record year for demolition of container shipping capacity (655,000 TEU), and a loss-making one for the industry. As market conditions and earnings improved in 2017, demolition activity declined. Still, a total of 400,000 TEU headed for scrapping that year.
As gates reopened owners acted promptly by breaking younger tonnage
With demolition yards closed due to the COVID-19 outbreak, breaking activity nearly came to a halt in April, handling just two container ships. While May saw only one container ship demolished, yards returned to business in June. With gates wide open again, owners decidedly let go of younger ships, as record high container ship idling spelled out troubled waters.
From January to May, the demolished ships were on average built in 1995, while the month of June had owners digging deeper into their fleets, bringing the average age down by two and a half years.