The number of cellular container vessels sold for recycling in 2024 fell to 56 units for 80,950 teu, which, in terms of capacity, is half of the 162,000 teu disposed of in 2023.
The main reason for this major drop was the continued bullishness of the freight and charter markets, which gave ship owners very little incentive to scrap their older tonnage, despite continuously firm demolition prices.
The way the demolition market unfolded in 2024 defied initial expectations that were betting on a massive surge in recycling sales due to the ageing of the world fleet, increasingly stringent environmental regulations and a whopping 3 Mteu of newbuilding capacity expected to hit the market.
However, most container vessels having to avoid the Suez Canal route and divert via the Cape of Good Hope created a massive surge in teu-mile demand. That not only helped to absorb all the newbuilding capacities but also triggered a strong demand for charter market tonnage.
With charter rates nearly doubling from their 2023 levels for certain sizes of ships and reaching in 2024 their best ever levels apart from the exceptional post-Covid demand boom years of 2021 and 2022, ship owners have had the best reasons to hold on to their older ships and stay clear of the demolition scene.
Source: Alphaliner
