A prolonged slowdown in container ship recycling has led to an estimated overhang of 500 vessels totaling 1.8 million TEU, according to BIMCO's latest analysis. The trend reflects ships remaining in service beyond their typical recycling age, reported Athens' Safety4Sea.

BIMCO analyst Niels Rasmussen said only 10 container ships have been recycled so far this year. This continues a pattern of low recycling activity since 2021, with many vessels trading past their expected end-of-life.

The proportion of ships aged 20 years or older has risen from 16 per cent in early 2020 to 24 per cent now. This marks the highest share of ageing ships since the early 1970s and suggests a significant pool for future recycling.

Historical data from 2000 to 2019 shows that 20 per cent of ships were recycled before reaching 20 years, and 53 per cent before 25 years. Applying these patterns to the current fleet supports the estimate of a 500-ship overhang.

Mr Rasmussen noted that market conditions before the 2008 financial crisis led to low recycling, while weaker conditions from 2009 onwards saw increased scrapping. The 2000-2019 period is viewed as a benchmark for average recycling behaviour.

Given the large order book, potential shifts in Suez Canal routing, and regulatory pressure for efficiency, actual recycling could exceed the minimum estimate. A maximum overhang of 850 ships and 3.1 million TEU is possible.

The highest annual recycling occurred in 2016, when 185 ships totaling 0.6 million TEU were scrapped. At that rate, clearing the current overhang could take several years.

Estimates suggest 6-10 per cent of the active fleet, or 33-55 per cent of ships over 20 years old, may be recycled. The overhang exceeds the order book for ships under 8,000 TEU, hinting at future fleet growth driven by larger vessels.