The spin is awesome. In 2021, international trade resumed vigorously as the first big wave of Covid passed. Immediate consequence: the price of shipping containers had skyrocketed (+150% in one year) while massive demand from China led to shortages of these essentials for the exchange of goods despite the increase in production.
Two years later, the easing of restrictions, the reopening of economies but also the global economic slowdown, in particular due to the war in Ukraine and inflation, are weighing on world trade. What causes a drop in the demand for packaging, surpluses and therefore a drop in production.
According to figures from maritime research consultancy Drewry cited by the Financial Times, container production fell 71% between the first quarter of 2022 and the same period this year, from 1.06 million units to 306,000.
Sales dropped 77%
What weighs down the activity of manufacturers, mainly Chinese. Profits at China International Marine Containers, one of the country’s largest producers, fell 91% on-year in the first quarter, the business daily said.
In question, sales plummet 77% after a “continuous drop in container trade and insufficient demand for new containers,” the company justifies. The same trend for Cosco Shipping Development, which saw its profits fall 71% in the first quarter of this year.
This situation should continue because according to the WTO, world export growth will stagnate this year (+1.7% vs. +2.7% last year). It is not enough to drive the demand for containers.
The ports are full of unused containers
With supply far exceeding demand, the world’s major ports have to manage thousands of unused containers left behind.
According to Anne-Sophie Zerlang Karlsen, Maersk’s head of customer delivery in Asia-Pacific, quoted by the FT, stocks are now at record levels in the region, adding that “massive amounts” of containers are expected to continue to accumulate. in the ports of the region throughout this year.
However, Michael Fitzgerald, deputy chief financial officer of shipping group Orient Overseas Container Line, said earlier this month that the glut at Chinese ports had subsided “in recent weeks.”
Source: BFM TV
