Deteriorating scrap values for containerships

Alang India, may 2016It has been reported by shipbroker Braemar that over 200 containerships have been scrapped so far this year, as overcapacity continues to drive down rates. This amounted to almost 700,000 teu of capacity, compared to just 187,000 last year. In the last 30 days some 32 vessels have been sold for scrapping.

Worst hit were panamax vessels: book values have plunged by over 60%, putting many on a par with their scrap value. However, a recent rise in the number of charters available has meant the number of ships laid-up has dropped from 357 to 336. This still left around 1.4 million teu container slots available worldwide.

The collapse of Hanjin Shipping last August has sent shock waves throughout the industry and made everyone very nervous. 34 ships owned or operated by Hanjin are still idle, including 28 that had been returned to their owners.

Meanwhile charter rates continue at rock-bottom levels: one broker recently claimed he had fixed a panamax charter at $3,900 for a two-month charter with options. However, some companies are profiting from this situation, buying up modern containerships at values said to be equivalent to the steel value.

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Troubles for Maersk continue to deteriorate

Following Moller-Maersk’s recent credit rating being downgraded by Moody from BAA1 to BAA2, with a negative outlook, and by Standard & Poor  to BBB, their problems continued to get worse.

maersk-shipperTwo of their offshore supply vessels, Maersk Searcher and Maersk Shipper, were being towed to a ship recycling yard in Turkey by another Maersk vessel, Maersk Battler. On 22nd December they were en route from Fredericia in Denmark. When they were approximately 60 miles off the French coast both vessels sank: at present no reason has been given for the loss of both vessels.

The vessels had been emptied of oil and fuel oil and flushed through, so Maersk stated that there was no danger to the environment. All crew were rescued and were safely on board the Maersk Battler. The French Coast Guard were notified of the incident and were investigating.

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