Ocean Cargo: Shipping analysts say vessel scrapping has declined

During the first six months of 2010, the active containership capacity has risen by 15.3 percent, jumping from 11.55 million twenty-foot equivalent units (TEU) on January 1 to 13.32 million TEU at the end of June, according to figures released by Alphaliner, a Paris-based consultancy.

The 178 million TEU increase includes new ship deliveries (0.74 million TEU) and the reactivation of idle ships (1.16 million TEU) while 0.12 million TEU of cellular capacity was removed through scrapping and conversions. The total cellular fleet (active and idle) has reached 13.67 million TEU, up from 13.06 million TEU at the beginning of January.

Despite the influx of new buildings, the idle capacity dropped from 1.51 million TEU at January 1 to 0.35 million TEU end June. According to Alphaliner analysts, this was largely due to the higher-than-expected recovery in demand in the first half of the year and to the impact of “Extra Slow Steaming,” which has absorbed an additional 0.32 million TEU in 6 months.

“The pace of scrapping has slowed down considerably since last year’s highs” said an analyst. The number of container vessels scrapped in the first six months of this year has reached 111,000 TEU.

He added that another 8,500 TEU were removed through conversions of cellular ships into other ship types (bulk carriers and sheep carriers).

“All major carriers saw their active capacity increase in the last six months,” stated Alphaliner. “NYK was the only carrier in the Top 20 to have recorded a decrease in active capacity as it embarks on its new strategy of reducing its exposure to the liner trades.”