17 June 2024 (Lloyd's List) - MEDITERRANEAN Shipping Co has sold two 1990s-built containerships for Hong Kong Convention recycling as the world’s largest boxship operator continues its purge of ageing, high fuel-consumption, tonnage.
The 1991-built MSC Grace F (IMO: 8918057) is reported by cash buyer Wirana Shipping to have been sold to Indian recyclers at Alang. The 965 teu ship realised $545 per light displacement tonne.
The total sale price, of circa $4.1m, included 150 tonnes of remain on board bunkers.
MSC Grace F was built in the former East Germany for the defunct Ukrainian shipowner Black Sea Shipping and was purchased by MSC in 2002.
At the same time, MSC has sold the 25-year-old MSC Tia II (IMO: 9193680), also to Alang-based ship recyclers.
The 1,835 teu ship was sold for $570 per ldt. MSC Tia II was purchased by MSC from a Greek tonnage provider in 2022.
With the sale of these two ships, MSC has sold seven elderly containerships for recycling in 2024 so far. The company offloaded a total of 14, mostly 1980s-built vessels, for recycling in 2023.
Another recent containership sale is that of the 2003-built Contship Pro (IMO: 9235622). This 1,100 teu vessel, owned by Greek tonnage provider Contships Management, was sold to Turkish ship recyclers with no price being reported.
A total of 37 containerships have now been sold for recycling since January with a combined capacity of almost 59,000 teu, according to data tracked by Lloyd’s List.
Braemar container market analyst Jonathan Roach told Lloyd’s List that recycling candidates so far this year have chiefly been very old, relatively small, ships forced into retirement by their high-fuel consumption and maintenance costs.
“Few larger ships (of above 3,000 teu) are being considered for removal. Since charter and freight earnings continue to elevate we are not expecting containership demolition to increase. Until earnings begin a slide, containership recycling will be held back.”
Roach noted that pre-pandemic long-term average annual capacity removals were around 295,000 teu per year between 2010 and 2019.
“In the years 2021 to 2023 the annual average removal rate dropped to just 55,000 teu. With strong earnings promoting demolition deferral, we expect a surge of recycling activity when the market eventually corrects. But the timing of this is unknown.”
Cash buyer GMS said that firm global freight rates across all vessel sectors have left the global ship recycling industry “on life support” over the past five quarters, as so few vessels are being circulated for scrap.
“Not only has ‘wet’ tonnage almost completely steered cleared of the bidding tables, but firming dry rates are forecasted to further do so through July,” added GMS.
