Box Ship Deliveries to Outnumber Scrapped Vessels 2 to 1 in 2017, Says Alphaliner

Alphaliner says the overall delivery figure for 2017 is expected to be twice as high scrapped for 2017.

Alphaliner, in its latest weekly report, says 2017 could see container ship deliveries outpace scrapping two to one.

Last week, Alphaliner said 2017 could be a record year for container ship scrapping, with as much as 750,000 TEU on track for demolition - now latest projections show that deliveries could be double this figure.

"Even accounting for a potential slippage of about 250,000 TEU, with some deliveries likely to be deferred by ship owners, the projected capacity additions would still reach 1.44 Mteu, with net fleet growth after slippage and scrapping forecast to reach 3.4 percent this year," said Alphaliner.

Compared to 2016's growth rate of 1.5 percent, 2017's relatively high fleet growth rate is expected to prolong the industry's overcapacity, further delaying the market's recovery.

Further, the influx of newbuildings is expected to swell the idle fleet, which currently sits at 1.4 million TEU.

"Although weak market conditions could force owners to further delay the deliveries of some of these ships, this is unlikely to result in a significant increase in slippage numbers above Alphaliner’s current forecasts," explained the consultancy.

Alphaliner further notes that 78 percent of the 1.69 million TEU of new container ship capacity expected to be added to the fleet will be concentrated among ships above 10,000 TEU.

Earlier this month, David Arsenault, Hyundai Merchant Marine's (HMM's) former CEO for the Americas, suggested that, if global container shipping's new mega alliances that are set to launch in April do not ensure freight rate increases, the industry could see more bankruptcies and mergers.