Second-hand boxes in short supply

IN WHAT has been an extremely volatile market in recent times, the latest situation in the global container market is that new containers are relatively cheap, but second-hand units are virtually unobtainable at any price (particularly in SA). “Internationally and locally, you just can’t get secondhand containers,” said Darren Singh, director of container suppliers and converters, Container World. It’s a bit of a different story in the new container market, he added. In the last three years, the supply/demand situation has rapidly fluctuated upand- down. At the beginning of 2004 there was a serious undersupply of units, and prices soared. This persuaded a lot of new container manufacturers to enter the market – with Chinese companies (which now have about a 9 0% market share) dominating proceedings. “Things then swung round very quickly to oversupply,” said Singh, “and by 2005 there was a stockpile of about 750 000 unsold units – and the price of new containers dropped substantially.” But there was still a relatively sluggish demand in 2005, and it was only by the end of that year that the excess supply began to be absorbed into the market. By then, however, a lot of container charter operations had entered replacement phases, and large numbers of “super” container ships over 8 000-teu capacity began to come off the launching slips. Demand rose substantially, and by mid-2006 prices had again risen. But, after this splurge of demand was satisfied, prices eased off again towards year-end. That was the situation in the first half of this year, with the price downtrend also being accentuated by a new cut-price element, according to Singh. “In the new container market,” he told FTW, “standard containers were being made of Corten steel with a thickness of 1.8-millimetres. But manufacturers then started making them of thinner, 1.6-mm, steel – and this cost saving saw prices again taking a tumble.” However, it’s a completely opposite situation in the second-hand container market, Singh added. “Demand,” he said, “has remained continually high. But, with ships on most trades – particularly the Far East, where most second-hand units originate – running full, and shipping lines preferring to use their own container fleets, they are just not keen on carrying one-way container shipments. “In SA that makes for a serious shortage of used boxes, and has seen prices rise by over 35% in recent times."