The first month of 2023 was the busiest month for container vessel demolitions since July 2020, according to a recent VesselsValue report. A total of 13 boxhsips were sold for scrap in January, including four feedermax container ships and nine handy container vessels.
“All sales reported were on the smaller scale, with four feedermax vessels committed and nine handy container ships setting sail for their final voyage to be recycled in India,” reported VesselsValue.
The average age of the nine boxships was 27 years old with all the vessels scrapped having been built in the 1990s. “This indicates that ship owners are only scrapping what is absolutely necessary,” pointed out Rebecca Galanopoulos Jones, senior content analyst at VesselsValue.
After reaching an 18-month low in December, scrap prices firmed once again in the previous month, with an average of US$580/LDT. At the same time, values for feedermax vessels are down 64% year-on-year to a January average of US$11,579/day.
This provides incentives for owners looking to scrap their oldest and least efficient vessels,” noted Rebecca Galanopoulos Jones.
As shown in VesselsValue’s chart, container ship demolition sales were very low in the period April 2021 – November 2022, before a small spike in the last month of 2022.