- Container xChange saw turning point in mid-February.
- Liners have realigned containers to meet transpacific demand.
Elevated rates for shipping containers have begun to ease, according to market participants from various regions, but remain well above levels seen prior to the pandemic, reports ICIS.
Global container shortage
A global shortage of shipping containers that’s sent ocean freight rates skyrocketing shows signs of easing, according to an index that tracks the steel boxes used to transport 90% of the global trade in goods.
Higher costs for containers were brought on by the extreme high demand for goods from China during the pandemic, as consumers have been buying products instead of visiting restaurants, travelling or attending events.
Most chemicals are liquids and are moved in tankers, but container ships move polymers such as polyethylene (PE) and polypropylene (PP), which are shipped in pellets.
Container rates plunge
Traders in Europe, where the spike in prices was less drastic, told ICIS they have seen rates for containers fall by about $400-700, with another trader saying they are certainly seeing more availability and are being quoted lower prices for April.
A third trader in Europe said container rates are currently averaging around $3,000-3,500 per container.
Containers from Asia to South America were heard this week around $7,200/container, and $6,750/container from Singapore to South America. In February they were around $9,000, including some as high as $12,000.
A plastic resin distributor based in Canada said it has not seen any significant decrease.
“There was some availability for space this week here and there from Europe and Brazil, but not from China, South Korea, Singapore or Vietnam,” the distributor said.
In February, the distributor saw rates from Vietnam to Toronto at $6,000/container, where a typical range before the pandemic would be about $2,200-2,400/container.
Participants in the polymers markets said they have seen container rates fall to $5,000-6,000/container this month, down from $9,000-10,000/container in February. Container rates were around $2,000 before the pandemic.
Container Availability Index
The Container Availability Index developed by Hamburg, Germany-based Container xChange should stay around 0.35 to 0.38 through Chinese Lunar New Year in mid-February.
A reading of 0.5 reflects a balanced market, with anything below that mark indicating demand is outstripping supply. The levels had reached lows ranging from 0.06 to 0.13 in December depending on the size of container tracked.
Imbalances around Shanghai, where shortages late last year were particularly acute as Chinese factories returned to full production and exports to the U.S. surged, are headed back to normal levels, Container xChange also said. The index level for Qingdao, for instance, returned to the 0.5 balanced mark, it said.
Shipping liners have tried to realign their containers with the demand on transpacific routes, and “due to the aggressive repositioning of empties back to China by the shipping lines, Chinese New Year stands to become the turning point of equipment shortage.”
Also helping to alleviate the crunch are Chinese container manufacturers that are running at full production to produce more.
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Source: ICIS
