Container Prices Double, Leasing Rates Triple in China
The average container prices in China have reached their highest in two years, at US$3,600 this week for 40 ft high cube cargo-worthy containers in China.
These prices were somewhere around US$1,700 in March – April 2024. This is a 112% increase in a span of two months.
While the average container prices (for purchasing containers) are on a significantly upward trend, the average one-way pick-up charges (for leasing containers) continue to develop at a staggering rate so far in June.
“While prices and rates are significantly up, trading volumes have decreased as buyers
are becoming more cautious. This trend potentially indicates a potential reversal of
prices in the near future, as the market adjusts to the current disruptions and the high
levels of volatility.” shared Christian Roeloffs, cofounder and CEO of Container xChange.
Encouraging growth in China’s container throughput
China's ports recorded a 9% YoY increase in container throughput in the first four
months of 2024, handling 104.03 million TEUs. Foreign trade cargo throughput
increased by 9.1% YoY
Total cargo throughput reached 5.55 billion tonnes; a 5.2% rise compared to the same period last year.
Sanctions and Tariffs to Impact Euro-China Trade
The European Commission has proposed tariffs of up to 38% on Chinese electric vehicles, in addition to the existing 10% tariff, citing concerns over state subsidies. While the Container shipping sector is not directly impacted by these EV tariffs, we view this development as an early signal of potential broader trade tensions. If the proposed tariffs are implemented, the cost of exporting Chinese EVs to Europe will rise, possibly leading to a tariff war. This escalation could result in increased tariffs on a wider range of goods, impacting global supply chains. Higher tariffs and trade barriers could lead to delays and additional costs in the supply chain, causing inefficiencies in container utilization and higher operational costs for shipping companies.
Market Outlook
“Despite the current tariff dispute, the long-term outlook for China's container market remains cautiously optimistic. The positive trends in US retail demand and robust growth in China's port throughput suggest sustained demand for container shipping services. However, the resolution of the EU-China tariff dispute will be crucial in shaping the short-to-medium-term market dynamics,” commented Christian Roeloffs, cofounder and CEO of Container xChange.
"Container shipping companies should prepare for potential shifts in trade patterns by
diversifying their routes and enhancing logistics capabilities in other growing markets, such
as Southeast Asia and South America. Investing in technology and infrastructure to improve efficiency and reduce costs will be critical in navigating the potential market volatility and maintaining competitiveness," Roeloffs added.
