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Oversupply may see 7-8 year old containerships sent for scrap: Wirana

Oversupply may see 7-8 year old containerships sent for scrap: Wirana
Container vessels of just seven to eight years old could be potential scrap candidates amidst the severely oversupplied market, according to cash buyer Wirana Shipping Corporation.

Keyur Dave, cfo of Wirana, said it is “scary” to learn that less than 10-year-old container vessels were being considered for scrap. Last Friday, a 2006-built, 4,546-teu was sold for scrap – a record low age considering the typical 25-year operational lifespan of a ship.

“In the next couple of months we expect to see more containers up for scrap and this would put downward pressure on prices,” Dave told delegates at the Marine Money conference held in Singapore on Wednesday.

The supply glut has led to more than 100 container vessels in the 3,000-5,000 teu segment left idled, representing about 14% of the total fleet.

In the dry bulk segment, there are about 119 capesizes and about 60 VLOCs, just over 15 years of age, which today has become the scrapping age, according to Wirana.

Dave shared that about 70 capesizes have been demolished so far this year, and owners would like to see a total of between 100-125 capesizes head for the scrapyard this year.