22 January 2024 (Lloyd's List) - THREE containerships, one multi-purpose cargo vessel and a conventional refrigerated cargo ship have been sold for recycling in the past week, including two more ships sold by Mediterranean Shipping Co.
MSC, the world's largest operator of containerships, sold the 2,394 teu, MSC Jemima (IMO: 9051478) to recyclers in Alang, India according to cash buyer Wirana Shipping. No price was reported for the sale, under Hong Kong Convention terms, of the 1994-built vessel which had been operating an India-Pakistan service.
The MSC Jemima is part of a series of three containerships built in Spain for now defunct Mexican shipowner TMM, all of which were purchased by MSC in 2004 and 2005. The remaining vessels in the series MSC Krittika (IMO: 9051507) and MSC Nilgun (IMO: 9051492) remain in service in east Africa to Middle East and intra-Mediterranan services respectively.
The same operator has also sold the 17,500 dwt multi-purpose cargo vessel MSC Eagle F (IMO: 9190092) to Indian recyclers, reportedly for $505 per light displacement tonne.
With a container capacity of 1,118 teu, the 2000-built ship, which was only purchased by MSC in early 2022, was latterly serving on an intra-Africa service. With these latest sales, MSC has sold four ships since January 1 with a combined capacity of some 8,800 teu, which add to 14 vessels it sold in 2023.
Other containership sales reported by brokers in the past week comprised the 32-year-old 1,599 teu Jin Yuan He (IMO: 9008536), sold by Grand China Shipping to Bangladesh-based recyclers for $535 per ldt and the 650 teu MTT Singapore (IMO: 9131060) which was sold by Malaysian owners on an ‘as is' basis with handover at a local port.
Prior to the crisis in the Red Sea, container shipping market analysts had forecast that up to 500,000 teu of boxship capacity would be recycled in 2024, well up from the 145,000 which was removed from trading in 2023.
Such an upturn is expected to be frustrated by an increase in demand for containership capacity due to disruption to liner services caused by diversions from the Suez and Panama canals for the foreseeable future.
Containerships have provided some 60% of all recycling sales in ldt terms since January 1, as relatively strong freight rates in the dry cargo and tanker sectors have discouraged shipowners from selling elderly tonnage for scrap.
Only one other ship was reported sold in the past week. This comprised the 265,000 cu ft, 1991-built, refrigerated cargo vessel Green Freezer (IMO: 8819304) which was sold by Norwegian owners to recyclers at Alang.
Cash buyer GMS said that despite rising prices for steel plate in Bangladesh and Pakistan since the final month of 2023 only a trickle of recycling sales have been confirmed in 2024 so far.
"There seems a reluctance from shipowners to bite at current offers in the low $500s per ldt having seen levels around $100 higher only a couple of quarters ago," it said.
It noted an easing in letter of credit restrictions from the Pakistan and Bangladesh markets which has resulted in a "noticeable" interest to buy. Conversely, Indian buyers have continued to suffer with steel price declines.
"This is leaving Indian end buyers scratching their heads over whether they can, or even should, compete with their strengthening neighbours. Turkey on the far end remains as invisible as ever."
