South Korea’s shipbuilders are hoping for a pickup in the market for container vessels on news that relatively new ships are being scrapped due to the expansion of the Panama Canal, industry officials said Monday.
Reports say that Greek shipper Box Ships decided to dismantle its 4,547 twenty-foot equivalent unit (TEU) class container ship Vox Queens, less than 10 years old. German shipper Hermann Wulff also decided to send its 4,546 TEU vessel Viktoria Wulff to ship breaking yards, reports say.
This is the first time in 35 years that ships aged less than 10 years are being scrapped, industry officials noted, a result of the Panama Canal being expanded in June that allows passage for ships of up to 13,000 TEUs in size. Before the expansion, the biggest vessels that could pass through it were 5,000 TEU Panamax-class, which now have lost their competitiveness, officials said.
Some 170 Panamax container ships aged between eight and 13 years are waiting to ply new routes or be scrapped, they said.
According to shipper industry analyst Clarkson, 72 mid sized cargo transporters, between 3,000 and 5,999 TEUs, were dismantled this year, up to end of last month. The total scrapping of container vessels during the same period came to 145, amounting to 503,750 TEUs, a record since 1996.
Industry officials say such a trend will create a new market for building container vessels that meet new needs. An IMO convention of ballast water management takes effect in September next year and strengthening of environmental regulations in 2020 that limit sulfur oxide emissions will further create such demands, they say.
Clarkson has predicted in its latest report that next year’s orders of container ships will increase to 224 from 134 this year, making it the fastest recovering sector in shipbuilding. Orders for large vessels of more than 8,000 TEUs will increase from 23 this year to 74 next year, it projected.
“South Korean companies are competitive in this sector,” one official said. “They are likely to benefit.”
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Source: Yonhap News Agency