Container demolition
Since July 2020, January saw the highest volume of container demolition sales. All sales recorded were on a smaller scale, with nine Handy Containerships heading out on their last journey to be recycled in India and four Feedermax vessels committed.
The fact that all container ships that have been scrapped were built in the 1990s and have an average age of 1996 shows that owners are only disposing of things that are really required. After falling to an 18-month low in December, scrap prices increased once more, averaging 580 USD/LDT in January. Values for Feedermax vessels have decreased by almost 64% year over year to an average of 11,579 USD/Day in January, which offers incentives for owners to scrap their oldest and least effective vessels.
Other notable sales are the Sol Delta (1,728 TEU, June 1995, Stocznia Szczecin Nowa), which sold for 587 USD/LDT, and the SSL Kochi (1,725 TEU, June 1998, Daewoo), which sold for 580 USD/LDT, VV Demo value 580 USD/LDT.
S&P transactions fall to two-and-a-half-year lows
In December and January, cargo sales and buy transactions were at their lowest points since the second quarter of 2020. Due to various holidays celebrated around the world, December and January typically signify a seasonal dip for the sale and purchase industry. However, since the high in July, when 265 sales were registered, transaction numbers have been slowly falling. A little more than half of the sales were in the Bulker sector, followed by 31% in the Tanker sector, 13% in Containers, and 7% in Gas.
Bulkers and Tankers both accounted for 41% of sales in January, with Containers coming in at 15% and Gas coming in at 3%. Overall, 116 sales were reported, a tiny increase from December’s 114 sales, which represented a two-and-a-half-year low.
Tankers are still in high demand, but because prices are still so high, older, more affordable tonnage is being prioritised. The Bulker industry, on the other hand, is eagerly awaiting news from China regarding the relaxation of Covid-19 regulations to determine whether and when more economic stimulus measures would be implemented. The market has not yet reached its bottom in the container segment, and the charterers are no longer available to give longer-term fixtures at the prices we saw last year.
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Source: VV Blog
