Dry shipping container prices fall to lowest level since 2002

The price of an average container fell 15 percent during the first quarter of 2016, according to a recent report from London-based shipping consultant Drewry Maritime.    Prices for new dry freight containers declined to their lowest point since 2002 during first-quarter 2016 and are still going down, according to the latest edition of the Container Equipment Insight, published by the London-based consultant Drewry.
   Average container equipment prices fell 15 percent through the first quarter, as the deteriorating outlook for trade growth impacted pricing.



   The price of a 20-foot container has dropped to below $1,350 and the price of a 40-foot container is about $2,350, according to data supplied by Drewry.
   “As a consequence of this and the fact that steel and other material costs are no longer in decline, Drewry estimates that the container manufacturing sector made a small net loss in the first quarter of 2016. Used dry freight container prices also declined further, to a level not seen since in almost a decade.
   “New box output has slumped markedly this year, with leasing companies again showing a strong reluctance to buy,” said Andrew Foxcroft, Drewry’s lead analyst for the container equipment sector. “That suggests 2016 could prove to be the weakest year for box production since the collapse of 2009, with equipment increasingly in surplus. Central to the problem is the already sizeable stockpile of new containers at factories in China, including substantial production from 2015 still awaiting collection.”
   “Lessors’ inactivity can be further explained by the depressed state of rental rates, which dropped yet further during the first quarter. The average fell another 10 percent on its position late in 2015, having declined in line with prices. The slowdown suffered recently by the box lease industry has largely stalled its previous strong rate of fleet expansion, which had already resulted in lessors regaining much of the share (in ownership terms) lost during the preceding decade.”