News / Available extra box ship tonnage even harder to find this year

15/01/2025

The number of cellular container vessels sold for recycling roughly halved last year, compared with 2023, as demand for tonnage soared – and finding ships available for hire will be even harder this year.

According to Alphaliner data, the number of container vessels sold for scrap in 2024 was 56, 80,950 teu. In terms of capacity, this is half the 162,000 teu disposed of in 2023. While 51 were below 3,000 teu, 40% of the scrapped capacity came from MSC.

“The main reason for this major drop was the continued bullishness of the freight and charter markets, which gave shipowners very little incentive to scrap their older tonnage, despite continuously firm demolition prices,” the analyst explained.

And it “defied the expectations” of those betting on a surge in recycling sales, expected due to ageing fleets, environmental regulations and a continued arrival of newbuilds, Alphaliner added.

Indeed, maritime advisor Braemer’s Quarterly Fleet Statistics & Market Outlook for January reports that Q3 24 marked the most capacity ever ordered in a single quarter, an estimated 2.7m teu – nearly 70% of the new box tonnage ordered across the whole year.

“Geopolitics got in the way,” commented Alphaliner, noting that the additional transit time around Africa to avoid the unsafe Suez Canal created “a huge uptick of teu-mile demand”.

The absorption of newbuild tonnage not only voided the need for scrapping, but also triggered strong demand in the charter market. Braemer found that average charter periods doubled, to 11 months, by the end of 2024, and reported 180% growth in the container time charter index on 2023.

And it warned that the trend for longer charter periods would put more pressure on tonnage availability this year, with vessels available for hire some 35% fewer than in 2024.

The data-driven consultancy forecasts that, through to 2027, there will be a “period of fleet removals to mitigate potential increase in oversupply”.

It added: “It is likely that earnings may have peaked from 2024 highs and we could be entering a period of readjustment and alignment to more normalised trading conditions for liner companies.”