CONTAINERSHIP LAY-UPS CONTINUE TO SPIKE AS DEMAND SLUMP ROLLS ON

MSC Floriana Credit VesselFinder

According to the latest survey by Alphaliner, taken on 13 February, 366 vessels were idle, including those owned by lessors and non-operators, for a capacity of 1.6m teu, representing 6.2% of the global cellular fleet.

This compares with the 260, for a capacity of 1.3m teu, 4.9% of the fleet, noted by the consultant on 16 January.

The data shows a significant increase in carrier-operated idle tonnage, from 70 ships for 509,000 teu in mid-January, to 117, with a capacity of 734,000 teu, a month later, and a big spike in lay-ups of vessels of over 12,500 teu from 14 to 25.

And the number of carrier-controlled lay-ups will get progressively worse as a tidal wave of newbuild arrivals displaces incumbent ships in service.

Alphaliner said growth in commercially idled tonnage had “accelerated significantly” at the end of last year and “remained on an upward trajectory this month”.

The consultant added: “Vessel inactivity increased across all ship sizes with the exception of the below 1,000 teu category, which remained more or less stable.”

Meanwhile, with the asset values of elderly containerships collapsing over the past few months, to reach an equilibrium with their scrap value, MSC has followed up the demolition sale of the 1986-built 1,911 teu MSC Florina with that of the 2,098 teu 1987-built MSC Giovanna for recycling.

According to Vesselsvalue data, the asset and scrap valuation of MSC Giovanna stood at $6.5m, having slumped from an asset market value of $29m just a year ago.

MSC’s current fleet of 726 ships includes some 100 vessels that are aged 25 years or older. Alphaliner said: “It will be interesting to see if these sales mark the start of a much more substantial wave of demolition sales in the MSC fleet.”

Notwithstanding the bleak outlook for the freight market, the carrier is continuing with its quest of buying second-hand tonnage, taking advantage of the reduced asset prices.

One S&P broker told The Loadstar: “It is about the only carrier that is still interested at the moment as the other lines say they have too many ships already.”

And, according to brokers, MSC recently snapped up the 3,091 teu, 2004-built Hammonia Lipsia, which it has renamed MSC Lipsia 111. The transaction was completed for an undisclosed price, although according to Vesselsvalue, the asset value of the 19-year-old panamax is $10.5m, just ahead of its $8.77m scrap value.

Alphaliner said this was the 287^th second-hand vessel purchased by MSC since August 2020, when the carrier commenced its unprecedented buying spree of older tonnage.

However, many of the ships MSC purchased at the peak of S&P market activity will have seen their asset value, at least on paper, fall considerably.

Source: theloadstar.com by Mike Wackett