Alphaliner: New Boxships to Be Energy Efficient but Supply Overhang to Stay

by Ship & Bunker News Team
Thursday September 28, 2017

New ships on order from big players in the boxship sector will most likely be energy efficient which could push smaller, older ships out of the market, according to shipping analyst Alphaliner.

But this phenomenon would not be enough to remove the current supply overhang in the market.

CMA CGM and Mediterranean Shipping Company, which are two of the biggest container liner firms, have put in orders for 20 ships. 

"These new ships would bring the latest technologies aimed at reducing the energy consumption bills when the new low sulphur fuel rules are implemented in 2020, triggering a cascading that would make redundant smaller, older ships," according to Alphaliner's latest newsletter.

However, supply still outstrips demand making the outlook for the box shipping sector more downbeat.

New deliveries in the fourth quarter and the lack of a significant increase in scrapping will mean that "the overall capacity increase is unlikely to be absorbed" any time soon.

"Based on Alphaliner's current projections, the idle containership fleet will only be eliminated in the third quarter of 2019."

According to the analyst, much will depend on the pace of demand growth over the next two years.

"Demand would need to grow by more than 8% each year for the overhang to be cleared in 2018, while an annual growth rate of less than 5% each year will see the overhang extend into 2020."

Ship & Bunker News Team
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