- Containership scrapping remained extremely low in Q2 2025, with only three vessels sold for demolition.
- New U.S. tariffs on Chinese-built ships created uncertainty, discouraging vessel disposal.
- Strong secondhand values and firming charter markets led owners to retain older ships.
- Upcoming environmental regulations under the HKC may reshape demolition activity later in the year.
A thorough review of Q2 2025 shipping activity has been released, prepared by Dr. Michael Tsatsaronis and his team at the National and Kapodistrian University of Athens. The report integrates academic insights into current market dynamics, with contributions from students across undergraduate to doctoral levels, as per the report published by Container News.
Freight Rates Remain Volatile Due to Geopolitical Tensions and Uneven Demand
The second quarter of 2025 saw ongoing instability in the container freight market, marked by short bursts of rate increases, uneven demand patterns, and significant fluctuations across trade routes. While May and early June showed some positive signs, the overall market remained sensitive to broader economic and political shifts.
In April, the market appeared to stabilize after months of weak demand and declining rates. A slight rise in freight rates on key lanes—particularly between Asia and the United States—was observed, largely influenced by renewed geopolitical tension and tariff concerns between the U.S. and China. However, these improvements were short-lived. By the end of April, the gains had reversed, underscoring the market’s exposure to external variables such as trade policies, inventory cycles, and shifts in consumer demand.
May followed a similar pattern of volatility. Freight rates moved up and down based on changing sentiment and demand, with the transpacific routes seeing the most notable recovery. Improved U.S. import volumes in late May helped boost vessel utilization and push spot rates higher. This led to cautious optimism, hinting that certain market segments might be stabilizing. However, this recovery was uneven, as intra-Asia and Asia-Europe trades saw minimal improvement.
June began strongly, supported by the late-May momentum. Spot rates on routes from China to the U.S. and Europe rose due to increased bookings and port congestion in East Asia. But the gains were brief. As the month progressed, weakening demand—especially in the U.S.—began to weigh on the market. Concerns over consumer spending, interest rates, and inventory levels reduced booking activity, reversing earlier progress.
Despite these challenges, spot rates at the end of June were still higher than those in early spring, offering limited hope for the coming quarter. Nevertheless, market sentiment remains cautious, with carriers and charterers relying on short-term planning due to persistent uncertainty and ongoing geopolitical risks.
Strong Q2 Newbuilding Activity Driven by Fleet Renewal and Green Shipping Goals
The containership newbuilding market remained active throughout Q2 2025, with shipowners and carriers placing substantial orders despite ongoing geopolitical tensions, including rising U.S.–China trade disputes.
In April, HD Korea Shipbuilding & Offshore Engineering (HD KSOE) secured orders for 24 vessels from Asian and Oceanian clients. This included 20 ships of varying capacities—ranging from 1,800 to 8,400 TEU—scheduled for delivery in early 2028. The company also announced an additional contract for two boxships worth $400 million. Samsung Heavy Industries followed with an order for two vessels valued at $358 million, due for completion by January 2028, reinforcing South Korea’s strong position in advanced shipbuilding.
May saw further expansion, led by OOCL’s large-scale order for 14 containerships placed with COSCO-affiliated yards in China, valued at over $3 billion. These vessels are expected between 2028 and 2029. Meanwhile, Hapag-Lloyd contracted six 16,000 TEU dual-fuel vessels from Chinese builders Hengli Heavy Industry and Fujian Mawei, with delivery planned around 2027.
The pace continued into June. Ocean Network Express (ONE) placed an order with Hyundai Heavy Industries for eight dual-fuel containerships, each with a capacity of 16,000 TEU. Separately, Seaspan commissioned six 8,300 TEU methanol-powered vessels from Hudong-Zhonghua in China, which are expected to be chartered to COSCO. HD Hyundai Samho Heavy Industries, a subsidiary of HD KSOE, also reported a new order for two dual-fuel ships worth $280 million.
Overall, Q2 2025 reflected a robust newbuilding cycle focused on scaling up capacity and investing in cleaner propulsion technologies. The strong demand for dual-fuel and methanol-powered ships signals the industry’s shift toward sustainable operations, with delivery schedules stretching into 2029—a clear indication of confidence in long-term growth and the evolving regulatory landscape.
Containership Scrapping Slows as Owners Delay Demolition Plans
Containership demolition remained minimal in Q2 2025, continuing a broader trend of low scrapping activity across the shipping sector. Only three vessels were sold for demolition during April, with each heading to a different country—India, Turkey, and Singapore—marking one of the quietest months on record. This slowdown is largely attributed to strong secondhand vessel values and the disruptions caused by renewed trade tensions.
One of the key factors behind the hesitation to scrap was the sudden implementation of steep U.S. tariffs on Chinese-built vessels and a broader range of imported goods. The unexpected policy shift triggered widespread uncertainty in global trade routes and supply chains, prompting shipowners to hold onto older vessels rather than remove them from service. With freight markets experiencing temporary gains and charter activity firming in some areas, many operators preferred to continue trading aging ships instead of proceeding with demolition.
Looking ahead, the implementation of the Hong Kong International Convention (HKC) later in 2025 may influence recycling practices, especially concerning environmental standards and approved shipbreaking yards. For now, though, the containership demolition market remains largely inactive, reflecting both market uncertainty and the continued strategic value seen in retaining older ships.
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Source: Dr. Michael Tsatsaronis
