SIMIC

ACCORDING to Drewry's projections, the global pool of container equipment is expected to contract two per cent in 2023 due to weak trade growth and increased equipment disposals by owners, reports Hellenic Shipping News Worldwide.

Global container handling activity is anticipated to grow one per cent to 870.7 million TEU in 2023.



Despite stubbornly high inflation in some economies, there is an overall decline, and many countries are expected to see an increase in personal consumption and corporate investment in the latter half of 2023.



However, there is still an excess of containers in the global pool compared to the current and short-term trading needs and vessel slot operating capacity.



As a result, lessors and transport operators are actively adjusting their fleets to improve utilisation rates based on current market conditions.



In the second quarter of 2023, lessors' box utilization levels dropped to 97 per cent, the lowest since the third quarter of 2020 during the economic recovery from the lockdown.



This means that there will be high sales of used boxes to the secondary market in the second half of 2023 as owners get rid of surplus and aging equipment, while the demand for ordering new containers will remain weak.



The total production of new containers in 2023 is not expected to exceed 1.9 million TEU, the lowest level in 14 years.



However, newbuild box production is projected to recover in the future due to increasing containerised trading volumes, the need to replace aging containers, and the delivery of ULCV and large neopanamax ships.



By 2027, Drewry forecasts that the global pool of containers will surpass 56 million TEU, representing an average annual growth of around three per cent.



Though lessors will experience a decline in their market share this year, it is expected to recover from 2024 as liner profitability deteriorates and carriers return to the leasing market.



By the end of 2027, the leasing sector is predicted to control over 52 per cent of the fleet, according to Drewry's estimates.



Newbuild dry freight container prices have started to recover after six consecutive quarterly declines, but they remain about 25 per cent higher than their pre-Covid crisis five-year average.



On the other hand, prices of newbuild reefer containers have also rebounded but are at levels similar to their pre-pandemic period average, while tank prices continue to weaken.



Used dry freight container values have softened due to high disposal rates, but prices are expected to stabilise as destocking decreases.



Drewry foresees that the recovery in fleet growth will support moderate inflation in newbuild dry freight and reefer container prices over the next five years.



However, per diem rates are expected to recover at a faster pace due to increased carrier demand for leased containers, which will help support lessors' initial cash returns.