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 London’s Drewry Maritime Research.
Average container equipment price fell 15 per cent through the first quarter, as the deteriorating outlook for trade growth impacted pricing.
Because 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, the American Journal of Transportation reported.
"New box output has slumped markedly this year, with leasing companies again showing a strong reluctance to buy," said Drewry's analyst for the container equipment sector, Andrew Foxcroft.
"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 per cent on its position late in 2015, having declined in line with prices.
Source : HKSG.