Have spot rates reached their peak? 'We're not out of the woods yet'
There are tentative signs that soaring container spot rates may be coming to an end ...
© Libin Jose |
None of the 16 crew of the Prestige Falcon has yet been found, following the sinking of the 7,056dwt product tanker on Monday, meaning that this looks to be the deadliest Houthi strike so far.
The Comoros-flagged Prestige Falcon has rolled over and is suspended beneath the waterline, around 5nm south-east of Ras Madrakah, Oman, and is closer to the Persian Gulf than the Red Sea and Bab al-Mandeb strait, where Houthi attacks are generally concentrated.
Search and rescue operations for its crew of 13 Indian and three Sri-Lankan nationals are under way, according to Omani maritime authorities.
At least 60 Houthi attacks on merchant ships have claimed the lives of four seafarers so far, but this number might now have quintupled, as the crew are suspected to have gone down with their ship.
The Red Sea attacks have been keeping containership charter and freight rates at an elevated level, with scrapping falling to lows not seen since the pandemic, Alphaliner reports today.
While some 2.3m teu of new tonnage was delivered last year, and a further 1.7m teu added to the 30m teu fleet this year, according to Alphaliner, the Red Sea crisis has pushed many vessels onto a route 20% longer, around the Cape of Good Hope, meaning the additional capacity has easily been absorbed.
A wave of expected vessel scrapping failed to materialise, falling to just 48,600 teu in the first half of 2024. By comparison, some 77,000 teu was scrapped in the first half of last year.
The current market is a boon for older and less-efficient ships, which would otherwise have been scrapped this year. Very low levels of scrapping were also seen during the Covid-19 pandemic, when many ships were locked in queues outside ports.
Despite a brief blip several weeks ago on talks of a ceasefire, “most industry stakeholders [are] now banking on continued CGH diversions until 2025 at least,” Alphaliner said, meaning that rates will continue at high levels and the scrapping market will continue to be impacted, “despite ever more stringent environmental regulations and pressure to phase out the less-efficient ships”.
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