In its trawl for tonnage, MSC has been buying vintage containerships ripe for demolition as, thanks to firm freight rate levels, their market value convinces owners to sell rather than to scrap.
For example, this month, the Swiss-Italian market leader took delivery of the 1999 5,652 teu MSC Unity VI, from Taiwanese peer Evergreen. The ship has a current market value of $22.5m, whereas its scrap value is just $14.5m.
The purchase follows that of MSC Floriana VI and MSC Unific VI last year, also from Evergreen, which had reportedly sought offers for Hong Kong Convention-compliant recycling and agreed to sell the vessels to MSC for a better price than demolition.
In January, MSC bought the 1999-built MSC Wind II from Norwegian owner Ness Risan for $7m, much above the scrap value of $4.92m, and also this month, the carrier purchased the 2002-built 4,389 teu MSC Tia V from Russia-focused Chinese operator Safetrans, for an undisclosed price. Its market value of $18.69m soundly beats its scrap value of $10.64m.
In May, MSC acquired four 2000-built 9,640 teu ships, MSC Jasmine X, MSC Denisse X, MSC Nicole X and MSC Chiara X, from Maersk for $30m each, a deal that pushed its fleet closer to the 6m teu mark. Their scrap value was $20.77m each.
Last week’s Alphaliner’s report said that, in the first six months of the year, only 34 vessels of 48,600 teu had been recycled, less than the 77,000 teu scrapped in the same period a year ago.
Alphaliner said: “There’s currently next-to-zero overcapacity, with an unexpected strong cargo demand also playing its part in the bonanza. As a result of this, owners and carriers clearly prefer to continue operating their older vessels at very profitable terms, rather than scrap them.”
