Classic panamaxes under severe pressure in Asia, scrapping on the cards

The sudden large volume of classic panamaxes struggling to find employment again could make owners think about a renewed batch of tonnage to scrap. The sector saw huge numbers of ships sent for recycling three years ago and had climbed out of trouble by early 2018. However, Alphaliner is now reporting there are 41 ships in the 4,000 to 5,299 teu range in spot position, up from 32 at Alphaliner’s previous count.

“The supply environment has been constantly worsening in this segment since September, as demand remains insufficient to absorb the available capacities,” Alphaliner reported in its most recent weekly report. “This is becoming a major concern for owners who will need to weigh up their options going forward, should demand fail to pick up. Lay up might make its come back, whilst the older units could face demolition or be sold to some end users.”

Nevertheless, Alphaliner reports that charter rates remain remarkably resilient to the rising overcapacity in Asia with handy units in the 4,250 teu range still being fixed at $8,000 per day, while 5,000 teu ships remain fixable at around $7,000 per day.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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