AFTER a period of historically high freight rates, the container sector is said to have peaked, with it now experiencing a market correction, reports Hellenic Shipping News Worldwide.
It has reduced demand across the container sector, easing port congestion across Chinese and American ports and consequently softening charter rates.
The 4,250-TEU VesselsValue panamax one-year time charter rates peaked at US$99,000 a day in March this year.
However, by the end of September, rates had nearly halved, falling to $51,000 a day.
Container values have risen steadily over the last two years until August. However, following the pattern of the freight market, this sector has since seen a fall in value.
For example, the price of a five-year-old panamax container ship has fallen 25 per cent from the highest point in April of $118.391 million to 89.6 million by the end of September.
Demand for newbuildings slowed over the year, as shipyard order books reached capacity during 2021.
The primary type ordered in 2021 was 15,000-TEU panamax vessels by the likes of OOCL, Cosco Shipping, Seaspan, Evergreen and Wan Hai Lines.
This year, however, is postpanamax with CMA CGM, MSC, Seaspan and Eastern Pacific all ordering 7,000- to 7,800 TEU vessels.
Sales liquidity is down for the container sector, which started the year with firm values. But since the onset of rising inflation, demand has decreased and congestion at ports has eased.
The Mediterranean Shipping Company (MSC) was the largest buyer with seven vessels purchased; Wan Hai Lines was the second largest buyer with four subpanamax resales.
Congestion is still supporting the market, but TEU volumes on the primary trade lanes are slowing following a good first half of the year.
Nevertheless, newbuilding prices will generally remain at current or higher levels through the coming year.
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