Although the supply element in used containers went through the roof last year, the demand element had also slumped – and it was difficult to find a good home for the cheap containers that had become available, according to Darren Singh, GM of the major suppliers and converters, Container World. “The slump in the market caused by the global recession hit the shipping industry hard,” he told FTW, “with many shipping lines cutting back on staff and selling off containers to keep themselves liquid.” But this boost to the supply of containers was matched by a similar slump in a major market – the mining industry. It had become a thriving market for used containers as it stepped up exploration in Africa, with new mining and drilling sites springing up all over the continent. “With the containers usually also destined to remain permanently on site – for storage or workshop purposes, for example – shipper-owned units were a most cost-efficient answer,” said Singh. But the worldwide recessive slump also caused the mining sector having to trim its financial wings, and cut back on costs. “This,” Singh added, “had a restraining effect on our supply of specialised equipment to them.” So, by the beginning of November last year, container prices had dropped drastically, and there was abundant supply. But, according to Singh’s market report, this has changed in the past few weeks. “Demand has suddenly hit an alltime high after the slump,” he added, “and supply has become scarce. There was also the threat of prices being pushed up with an imminent steel price increase on May 1 “Also, investigations by the SA Revenue Service (Sars) into containers which had not been customs cleared, resulted in many shipping lines putting a stop on the sale of any of their equipment in the SA market.” This, along with prices in Europe and the Far East having spiralled out of control, also had an adverse impact on the supply/cost equation. “With the World Cup looming,” Said Singh, “we can only hope to satisfy the needs of our clients as well as the events companies who require containers during this competition. “We will all have to scrape the bottom of the barrel to get our hands on whatever equipment we can, in order to keep afloat.”
