THREE million TEU delivered last year and some 1.8 million TEU due to be delivered this year vessel scrapping will begin in earnest and will continue at pace until 2027, reports UK's Seatrade Maritime News.

Shipbroker Braemar said in its first 2025 quarterly report: "It is likely that earnings may have peaked from 2024 highs and we could be entering a period of readjustment and alignment to more normalised trading conditions for liner companies."

Another shipbroker told Alphaliner: "Buoyant market. Last year, the average age of the (few) containerships that were sent to scrap reached a high of just above 28.6 years, the oldest age recorded in 13 years."

According to Braemar data of the 60 vessels sent for demolition last year, 45 were in the 1-1,999 TEU bracket, one was over 7,500 TEU.

A Red Sea ceasefire and the resumption of trade could be problematic. Xeneta analyst Peter Sand said: "The ceasefire deal will need to enter stage two before we can say that the ceasefire is holding."

Even so Xeneta estimates that demolition levels could reach 200,000 TEU this year, with smaller ships again being the main focus and some below standard ships up to 5,000 TEU.

Offsetting the economic imperative will be the introduction of the Hong Kong Convention on recycling of ships, requiring significant improvements in breakers yard safety and environmental management.

"In the Indian sub-continent, a number of yards have yet to comply with the new rules," said Alphaliner, which raises a question over the capacity of the demolition yards to meet the demand, should the economic conditions substantially change over the coming weeks and months.

Xeneta does not believe that the Hong Kong Convention will have a substantial impact on the demolition of the container fleet.