The Baltic International Maritime Council (BIMCO) has almost doubled its forecast for demolition sales of containerships to 500,000 TEU for this year from an earlier forecast of 290,000 TEU, according to Shipping Gazette.
This is because demolition sales have so exceeded forecasts this year, chief shipping economist Peter Sand said in a monthly review of the shipping markets.
"BIMCO updates the outlook for volumes set for demolition during the full year of 2014 to 500,000 TEU to reflect oversupply and cascading," he said, reported IHS Maritime 360.
In 2013 the figure was three per cent, and Mr Sand forecasts demolition sales to exceed two per cent of the total fleet in 2015 and then decrease to two per cent for the next two years.
"In 2013, fourteen ships above 4,000 TEU were demolished, none of them larger than 5,000 TEU. In 2014 year-to-date, 35 ships above 4,000 TEU have been demolished already," he said.
"This includes seven sister ships built in 1996-1998 above 5,000 TEU," Just four per cent of the containership capacity in TEU terms are 20 years of age or older; and 73 per cent of the ships are no more than 10 years of age.
"This profile theoretically leaves little room for massive demolition potential, but the reality appears quite different," Mr Sand said.
"BIMCO continues to expect the container shipping industry to steer itself along the lines of the 'new normal', where a demand growth of five to six per cent must be matched by an equivalent supply growth.
"There will be no more double-digit growth figures as in past decades. For 2014 the fleet is expected to grow by 5.2 per cent-a low level not seen for 15 years," he said.
Looking to the second half of the year, "Overcapacity is intrusive, and tonnage balance will be difficult to maintain."
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