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Shipping
lines, as was reported recently in Hong
Kong Shipping Gazette, are scrapping vessels
at a record pace to date, and Alphaliner
expects that the full year figure for vessel
scrapping could reach 450,000 TEU, based
on the current demolition rate.
This
would also mark a record high for ship demolitions,
to match the record high for vessel deliveries.
So
if we assume an increase in container shipping
supply of 1.7 million TEU, then we remove
450,000 TEU we are left with an increase
in shipping capacity this year of 1.25 million
TEU. This brings our worst-case scenario
of a 10 per cent increase in shipping supply
down to eight per cent.
We
are now left with a supply growth overhang
of five per cent - again this is measured
against a worst-case scenario in terms of
demand growth.
The
next factor we can look at is vessel lay
ups. Idle tonnage cannot be included in
the active vessel fleet for the simple reason
that these vessels are not active. Therefore,
their non-active status equates to a removal
of capacity, even if only temporal.
To
date the idle containership fleet stands
at 634,000 TEU, according to the latest
figures from Alphaliner.
A
number of new services are being announced
by the lines, which has seen the idle fleet
diminish somewhat of late. So for the time
being, let's round this number down to 600,000
TEU.
In
removing a further 600,000 TEU from the
equation we have now effectively brought
the increase in active shipping capacity
in 2013 down to just 650,000 TEU.
This
brings our capacity growth figure down from
eight per cent, after scrapping, to just
four per cent for the year. Thus in a worst-case
scenario where shipping demand grows by
just three per cent, then the supply overhang
is just one per cent.
Add
this to the fact that shipping lines will
continue to employ slow steaming in a bid
to reduce any further supply surplus in
the market, then we are looking at a very
balanced supply and demand situation this
year - at least in terms of growth rates.
Last
year, however, supply growth did outpace
demand. According to Clarkson's figures
demand grew just 3.3 per cent against an
increase in fully cellular container shipping
capacity of roughly six per cent - a supply
overhang of 2.7 per cent.
So
what does all of this mean? Well let's first
look at how the carriers performed last
year, in spite of the supply surplus.
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