Monday, 7th November 2011Just as shipping container prices looked set to soften the factories in China are thought to be considering closing. As new container orders continue to dwindle and factory yards remain full of equipment, closures again loom on the horizon. Whether this is out of necessity or merely a ploy to restrict supply and prevent prices dropping is a matter of opinion.
Similar tactics were employed by the factories in 2009 when production all but stopped completely for 12 months. The ensuing vacuum caused prices to rocket and the lines to panic, snapping up equipment from the leasing companies on long leases with restricted drop offs.
Far from affecting only new production, second hand container prices changed too, almost doubling in many cases and still holding today. There is a direct knock on effect for other areas such as container conversions and self storage as the cost of equipment remains high.
Supply, demand and replacement costs have seen used equipment prices rise as the holding depots remain empty. Stocks are starting to build very slowly in some locations, however this is usual for the time of year as seasonal imports cause a temporary influx.
Rising fuel costs and overcapacity will see the lines finances continue to struggle. This could see the trend for them to lease containers rather than build continue, a factor that will further compound shortages.