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."