Marine Link
Saturday, March 24, 2018

Container Equipment Prices Nosedive - Drewry

Maritime Activity Reports, Inc.

May 10, 2016

Container newbuilding prices (US$) Source Drewry Maritime Research

Container newbuilding prices (US$) Source Drewry Maritime Research

Prices for new dry freight containers declined to their lowest point since 2002 during first-quarter 2016 and are still going down, according to the latest edition of the Container Equipment Insight, published by global shipping consultancy Drewry.

Average container equipment prices fell 15% through the first quarter, as the deteriorating outlook for trade growth impacted pricing. As a consequence of this and the fact that steel and other material costs are no longer in decline, Drewry estimates that the container manufacturing sector made a small net loss in the first quarter of 2016. Used dry freight container prices also declined further, to a level not seen since in almost a decade.

“New box output has slumped markedly this year, with leasing companies again showing a strong reluctance to buy,” said Andrew Foxcroft, Drewry’s lead analyst for the container equipment sector. “That suggests 2016 could prove to be the weakest year for box production since the collapse of 2009, with equipment increasingly in surplus. Central to the problem is the already sizeable stockpile of new containers at factories in China, including substantial production from 2015 still awaiting collection.

The lessors’ inactivity can be further explained by the depressed state of rental rates, which dropped yet further during the first quarter. The average fell another 10% on its position late in 2015, having declined in line with prices. The slowdown suffered recently by the box lease industry has largely stalled its previous strong rate of fleet expansion, which had already resulted in lessors regaining much of the share (in ownership terms) lost during the preceding decade.


Maritime Reporter Magazine Cover Mar 2018 - Annual World Yearbook

Maritime Reporter and Engineering News’ first edition was published in New York City in 1883 and became our flagship publication in 1939. It is the world’s largest audited circulation magazine serving the global maritime industry, delivering more insightful editorial and news to more industry decision makers than any other source.

Maritime Reporter E-News subscription

Maritime Reporter E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

Subscribe for Maritime Reporter E-News