New Record for Youngest Container Ship Demolition

The seven-year-old Hammonia Grenada, delivered in 2010, has taken pole position as the youngest container ship ever sold for scrap. The previous record-holder, the Panamax Rickmers India, was delivered in 2009 and sold to shipbreakers last month. A brokerage data firm reported a sale price for the Grenada of $315 per LDT, or about $5.5 million.

Brokers say that the demolition is a confirmation of the plummeting value of Panamax ships after the opening of the expanded Panama Canal. Vessels of up to twice the capacity of the India and Grenada can now carry containers on trans-Pacific routes to the U.S. East Coast and to Latin American hubs like Freeport, Santos and Buenos Aires. With lower slot costs, this "Neopanamax" vessel class has made the older Panamax ships less competitive in an oversupplied market, and shipowners are finding it increasingly difficult to charter or sell 4,500 TEU vessels. Panamaxes lost about two thirds of their value in 2016, and they are headed to the breakers in record numbers: BIMCO said in November that boxship demolitions reached an all-time high for the ten months ending in October and accelerated in the second half, led by Panamax scrapping. 

The Chinese-built Grenada (ex name CSAV Laraquete) is the second mid-size boxship scrapped by Hammonia in the past year, following the 3,100 TEU Westphalia, another relatively young vessel. While the buyer of the Portuguese-flagged Grenada was not disclosed, the Westphalia went to a Bangladeshi yard. Advocates including NGO Shipbreaking Platform have called on the European Commission to ban the sale of European-flagged vessels to yards in South Asia under new ship recycling regulations, which are expected to take effect in the next two years. If effective and enforceable, a ban could have an effect on market dynamics: the prices paid by yards in Turkey and China may be as much as one third less than South Asian scrap values.