The latest report by Hamburg’s Container xChange on the global shipping market highlights a dramatic 45% spike in container prices in China during May. It further delves deep into the key drivers of this surge and how it foresees these to develop in the coming weeks and months.
Key insights include:
- Container Price Volatility: Prices for 40 ft high cube containers in China rose from $2240 in April to $3250 in May, a 45% increase. This is primarily due to Red Sea diversions stretching carrier networks and shippers pulling shipments forward to avoid future disruptions.
- Market Outlook: Despite the current spike, our analysis suggests this price bubble will burst in H2 2024, as it is not supported by strong underlying demand. High-interest rates and labor market concerns are likely to reduce consumer spending, leading to a potential decline in shipping volumes.
- Christian Roeloffs, co-founder and CEO of Container xChange, stated, ” Shippers are pulling shipment dates forward, resulting in a temporary demand for shipping capacity. This is reflected in higher throughput volumes, despite underlying consumer demand and factory orders being weak. Consumer spending in the US increased by only 2% in the first quarter of 2024, below the advance estimate of 2.5% and the lowest increase in three quarters. Also, retail inventories excluding autos in the US increased by only 0.3% month-over-month in April 2024, following a 0.4% decline in March 2024, indicating only cautious restocking by retailers. Additionally, new orders for manufactured goods in April rose by $4.3 billion, a 0.7% increase to $588.2 billion, while shipments increased by $5.9 billion or 1% to $590.2 billion, signaling robust demand in the shipping and container logistics market.”
(Dreamstime photo of container ship)
