Singapore owner scraps $60M ship

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IN a sign of just how persistent the overcapacity in the container shipping industry continues to be, Singapore shipping trust Rickmers confirmed in a statement that it has sold a seven-year-old containership, believed to be the youngest ever to be scrapped.

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IHS Markit data shows that the ship was initially bought for $60 million in 2009, but the Singapore-based container ship owner has been forced to sell the Panamax-class ship to deal with mounting bank debt, according to Port Technology International. The India Rickmers containership (previously known as the Hanjin Newport) has a deadweight of 50,574 tons and a capacity of 4,250 TEU (20-foot equivalent units), according to data from VesselsValue.

The ship has been sold in an attempt to repay senior loans from Germany banking company, Commerzbank. According to VesselsValue, the ship now has a market value of about $5.9 million.

The oversupply in the industry has seen vessel values drop significantly, along with freight rates, meaning younger and younger vessels are being considered for demolition as a means of rebalancing supply and demand in the shipping industry, Port Technology International said.

VesselsValue reported that the average drop in value across the industry has been 26 percent, which has contributed heavily to an increase in demolition activity throughout 2016.

Rickmers Maritime now has a fleet of 15 Panamax containerships with an average age of 8 years. The owner said in its statement that it would update its holders if there are any more developments concerning its vessel roster.

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