Low material costs and stable demand has driven the price of new container equipment down to record lows where it is forecast to stay, according to the latest edition of the Container Census report published by global shipping consultancy Drewry.
This follows news that the price of container-handling equipment could be expensive, and one of the only solutions available to ports to handle the increase in ship-sizes.
The container equipment index price hit a 10-year low in June 2015, falling below US$1,750 per TEU.
The index fell sharply in late 2012 before stabilising at just above $2,000 per TEU throughout much of 2013-14, but has declined sharply this year.
Andrew Foxcroft, Lead Analysist for Container Equipment at Drewry, said: “Much of the recent reduction resulted from a fall in material and production costs rather than any decline in demand or oversupply. Drewry is forecasting that the price index will, at best, hold at $1,800 per TEU for much of 2015-16, although it may go even lower.”
The global container equipment fleet amounted to 36.57 million TEU at the end of 2014, having increased in size by 6.2% during 2014, marking a small improvement over that of the preceding two years.
The fleet is forecast to expand at an annualised rate of close to 5% through 2015 to 2018, in line with the continuing modest outlook for trade growth.
Foxcroft continued: “Box fleet expansion will remain relatively weak because a growing share of the anticipated demand will be replacement purchases, while the outlook for global container shipping traffic is generally subdued.
“Drewry expects the leasing sector to hold on to its recently enhanced market share, even if shipping lines manage to increase their direct investment in new boxes, after several years of very poor fleet growth. The 40ft high-cube box will increasingly dominate within the global fleet.”
Foxcroft concluded: “The outlook is for container supply to remain in relative balance with demand and for annual production to rise only modestly in the run-up to 2018.”