Up to one hundred further panamax containerships will need to be scrapped before the segment can regain its footing again, analysts Alphaliner report in its latest weekly report. The sector has been the victim of what some have described as the greatest value destruction seen for a generation in the past year.
Ultra low charter rates, currently below operating expenses, have have failed to revive demand for this ship type.
Charter rates dropped below $5,000 per day in July last year and currently stand at only $4,000-$4,350.
Despite this, the idle panamax fleet of 4,000-5,300 teu has remained “stubbornly high”, Alphaliner reported. It currently counts 68 units, down from a peak of 98 units in October, and most of the reduction can be attributed to scrapping.
“Demand remains largely insufficient to notably reduce the overhang of surplus ships removed from trans-Panama routes,” Alphaliner reported.
There has been a massive scrapping spree in the sector that has seen 130 panamax units of 4,000-5,100 teu removed from the fleet since 2009, including 44 units scrapped in the last four months alone. The panamax fleet currently counts 563 ships, against 643 units two years ago.