CIMC sees significant decline in container demand in First-Half 2023

Containers manufactured by CIMC (Photo: Ji Haixin/China Daily)

Chairman and CEO of China International Marine Containers (CIMC) - Mai Boliang - predicts that demand for new containers will fall, by only 20% compared to normal years.

The head of the world's largest container maker spoke at a briefing on March 28 to release CIMC's 2022 results, which showed net profit falling 52% year-on-year to $466.55 million due to the normalization of the container shipping market.

Total revenue fell 14% to $20.51 billion, as container sales fell 31% to $6.62 billion.

Dry container sales are down 56% from 2021 to just over 1.1 million TEUs in 2022, while refrigerated container sales are down 11% to 131,400 TEUs. Net profit from the container business fell 55% to $762.03 million.

“In 2022, the global economic and trade growth momentum weakened due to factors such as inflation and significant interest rate hikes in Europe and the US,” Mai said.

“The container business is mainly affected by the variety of dry cargo containers, and the demand in the first half of the year is only 1/5 of that in conventional years,” he said.

Mr. Mai expects container demand to recover in the second half of 2023, as US retailers continue to hoard goods.

Mr. Mai explained: “Global trade remains slow, while China’s economy is still recovering after the (Covid-19) pandemic". “However, container prices have stabilised at just over US$2,200/TEU, and we expect prices to go up as demand recovers.”

Mr. Mai also observed that in recent years, many manufacturers have moved from China to Southeast Asia, but do not foresee a big change to container production in the near term, although the manufacturers' container production machines opened in Vietnam.

"In the past, the container industry was transferred from Japan and South Korea to China, and there may be a trend of moving to Southeast Asia in the future, but this is not easy," said Mr. Mai.

"In the short term, Southeast Asia’s share in the global container market will increase, but China will continue to dominate demand, production technology, equipment, and the supply chain."

See more:

• Maersk sells its container manufacturer to CIMC for $987.3 million

Source: Phaata.com (According to ContainerNews)

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