The container segment was one of the big surprises during 2014 with a very high scrapping activity in the year’s first half and a dwindling low one in the second, says the Baltic and International Maritime Council (BIMCO)
Container vessels have been a hot segment on the demolition market in recent years. The 1.1 million TEU scrapped the last three years alone covers half of the total sum since 1996.
"2014 turned out to be a very hectic year for the demolition market and it became clear just how volatile the market really can be. Previous experiences tells us the end of the year is usually one of the busiest moments for scrapyards, however in 2014 this effect was washed out by declining demolition prices. Overall, the year was one of decline with less DWT and fewer TEUs scrapped compared to previous years," says an analysis from BIMCO.
The first peak in container scrapping came in 2009 as the financial crisis started to take effect. 378,000 TEU was scrapped that year, more than the previous 10 years put together. The two following years marked by the high activity in 2009 resulted in a substantial lower scrapping of container vessels.
In 2013 the wheels had turned and container scrapping reached new heights when almost 200 containerships totaling 444,000 TEU were scrapped.
The initial estimates for 2014 were set relatively low at 250,000 TEU thinking the market might have peaked. The year however started at great speed and after only six months, the full year estimate was already met.
The raised estimate aimed for a substantially higher ground, but as prices dropped, scrapping halted in the second half of the year. In perspective, almost 75% of the total 387,000 TEU scrapped in 2014 was done in the first six months of the year.