Evergreen Marine Corporation, a major Taiwanese shipping company, has joined the trend of liner operators getting rid of older ships as the shipping market weakens. Last week, the company sold two vessels from 1998: the Ever Devote with a capacity of 4,211 TEU and the Uni Aspire with a capacity of 1,296 TEU. The Ever Devote was sold for $555 per light displacement ton (ldt) in its current condition, while the Uni Aspire fetched $585 per ldt for recycling in India.
In both June and February, Evergreen also sold two similarly aged vessels, the 4,211 TEU Ever Diadem and the 1,296 TEU Uni Ardent, for recycling in India. Cash buyer Wirana Shipping Corporation commented on the ship recycling market, stating that ship recyclers are cautiously optimistic due to market conditions, and they anticipate slightly better prices for new tonnage in the near future.
Apart from Evergreen, South Korean operator Sinokor Merchant Marine, which also provides tonnage services, has been gradually scrapping older ships. In the same week, they sold the 1998-built 834 TEU Sinokor Vladivostok for $589 per ldt for scrapping in India. Prior to that, ships of similar age and size, the Sinokor Akita and Sinokor Tianjin, were sold for demolition in the previous fortnight, all destined for India. In February, Sinokor sold the 1997-built 1,608 TEU Xiumei Shanghai for break-up in Bangladesh at a rate of $604 per ldt.
China United Lines (CULines), a company that has been in the news due to the reported detention of its co-CEO Raymond Chen and its withdrawal from long-haul routes, has scrapped a vessel for the first time. CULines, originally a non-vessel operating common carrier (NVOCC), started operating its own ships in 2012 and began purchasing ships in 2021 when freight levels reached historical highs. Last week, CULines sold the 1993-built 1,368 TEU UGL Hongkong for $530 per ldt in Oman, in its current condition. This marks the company’s first venture into ship demolition.
Global Marketing Systems (GMS), a cash buyer in the ship recycling industry, noted that rising steel prices in India have increased demand for scrap steel, which is positive for ship demolitions. GMS also pointed out that recent container sales have attracted attention in the industry, especially as prices gradually approach $600 per ldt. This has led owners of older vessels to consider the potential future of their aging ships.
Despite these developments, ship demolition levels have remained well below the 600,000 TEU predicted by Drewry for this year. Only slightly over 100,000 TEU have been scrapped so far this year. This is partly due to weak capacity discipline, despite an increase in blanked sailings leading up to China’s week-long National Day holidays in October.