25.10.27BIMCO: Only 10 Containerships Recycled This Year With Minimum Overhand of 500 of 1.8 Mil. TEUs

Only 10 containerships have been recycled so far this year, extending the low scrapping seen since 2021 as vessels trade beyond their usual recycling age, according to the Baltic and International Maritime Council (BIMCO).  

BIMCO estimates a minimum recycling overhang of 500 ships of 1.8 million TEUs. The share of ships 20 years old or older has risen from 16% of the fleet at the start of 2020 to 24% now, the highest share of older ships since the early 1970s, and is expected to dominate future recycling.

Based on historical patterns from 2000–2019—when 20% of ships were recycled before age 20 and 53% before 25—BIMCO calculates the minimum overhang noted above and, using the weaker market conditions of the 2010s, a maximum overhang of 850 ships of 3.1 million TEUs.

The overhang equals 16–18% of currently trading ships and corresponds to 33–55% of ships older than 20 years. It could take years to clear: the peak annual recycling was in 2016 with 185 ships of 0.6 million TEU.  

Segment data indicate the estimated overhang exceeds the order book for ships below 8,000 TEU—Less-than-3,000-TEU overhang: 400,000-700,000 TEUs versus a 200,000-TEU orderbook; 3,000–6,000-TEU overhang: 700,000–1.3 million TEUs versus a 200,000-TEU orderbook; 6,000-8,000-TEU overhang: 200,000-400,000 TEUs versus a 100,000-TEU orderbook; and 8,000-2.5-million-TEU overhang: 400,000-700,000 TEUs versus an 8.5-million-TEU orderbook.