SIMIC

This year so far, none has been scrapped, compared with 16 boxships last year and 2020, with total capacity of 16,500 TEU and 194,000 TEU, respectively, according to UK's The Loadstar.

At a recent industry conference, Mr Yen projected that while container shipping demand would grow between 2.6 per cent and 2.9 per cent next year, this would be outstripped by supply, up between 7.1 per cent and 8.1 per cent.

"Freight rates will continue falling next year, and ships unsuitable for long-haul routes will be withdrawn or demolished," he said.

"This year, container shipping demand will go up marginally, by between 0.5 per cent and 0.9 per cent, while supply will rise by 4 per cent. However, as freight rates remain higher than pre-Covid days, liner operators are still powering their vessels with more-expensive low-sulphur fuel oil (LSFO) and deploying small or mid-sized ships on long-haul lanes.

"Some large old ships that can't operate on LSFO will be recycled early. Therefore, it is expected that next year, overcapacity won't become a major challenge."

He added: "In 2024, however, the pressure on liner operators will be even greater, because in the past two years they made a lot of money and vigorously built new ships. It is expected that many newbuildings will be launched in 2024 and 2025, which will increase the pressure of oversupply."