30APR2019 - NEWS - Drewry expects that more and more containerships will be demolished ahead of IMO 2020

Drewry expects that more and more containerships will be demolished ahead of the International Maritime Organisation (IMO)’s 2020 sulphur cap, reducing the average age of scrapped vessels as the pool of older ships is depleted.

Many older and less-fuel efficient ships will be rendered uneconomic while a growth in fitting exhaust scrubbers may force charter rates down for some ships not fitted with the system, thus swelling the number of demolition candidates.

So far owners have resisted a large scale cull, although it could help alleviate the container market’s over-capacity crisis, with slow progress made toward an increase in the number of containership demolitions.

At an eight-year low, approximately 120,000 teu was sold for scrap in 2018 and the figure could have been lower without a surge in the fourth quarter that saw half the annual total removed from the active fleet.

Containerships tend to depreciate over 25 years so in order to make a difference in the fleet total Drewry has suggested that owners look to younger vessels for demolition.

Those that own the retrofitted ships may foresee plenty more years of revenue generation from their assets but it would help the supply-demand balance if more of the top end of the age range were to be demolished.

Published by Editor - www.Livebunkers.com at 30-Apr-2019 09:32:55 [UTC] , contact editor at editor@livebunkers.com