22.10.2024
Container leasing charges from China to the U.S. plummet by 63%
- Pickup charges of shipping containers from China to US continue to decline by 63% after reaching a peak of $969 in July to $350 in September
- Average container prices continue to decrease by 11% in Shanghai from $3307 in August to $2973 in September, after reaching a peak in June this year at $3617.
In October 2024, Beijing introduced a series of fiscal and monetary interventions, including interest rate cuts and measures to boost liquidity in the banking and real estate sectors. While liquidity injections, such as the 50-basis-point cut in the reserve requirement ratio, are expected to support immediate recovery, the underlying structural issues—particularly in the real estate market—persist.
For the container logistics industry, the Chinese economy is facing a period of stabilization in the container trading sector, marked by both global and domestic pressures. Supply chain bottlenecks and changing trade patterns have led to a mixed environment for container prices. Geopolitical developments, including the Middle East tensions and U.S.-China trade dynamics, continue to impact the flow of goods and the cost of transportation. Retail sales and industrial production picked up in September.
Container Prices stabilize across China
Based on the most recent data, container prices in key Chinese cities have plateaued and started to decline beginning June this year, (2024) signaling a stabilization phase in the market.
Chart 1: Monthly average prices for container (trading) from June 2023 to October 2024 across key locations in China
While prices have remained relatively stable, this plateau reflects a cooling demand for containers in the region as China faces global economic shifts coupled with other macro-economic factors. The stabilization is indicative of a realignment in supply chain activity, with fewer price fluctuations compared to previous months.
“We are witnessing a plateau in container prices across China, which signals a stabilization in the market. The balance between supply and demand is setting a new equilibrium, providing an opportunity for traders to capitalize on this moment of relative price consistency.” shared Christian Roeloffs, cofounder and CEO of Container xChange.
Pickup charges continue to decline fourth month in a row
Pickup charges from China to international markets, particularly the U.S., have shown a notable decrease in recent months. After reaching a peak in mid-2024, the average pickup charges have begun to decline, offering an economic advantage for traders moving containers out of China:
Chart 2: Average pickup charges for (leasing) containers from China to US
Current Pickup Charge: Declined from the peak but still providing ample incentives for container movement.
This decline in pickup charges enhances the attractiveness of repositioning containers to high-demand regions like the U.S., where prices are rising.
“Although pickup charges are declining from their peak earlier this year in June, they remain stable enough to encourage profitable repositioning of containers from China to high-demand markets like the U.S. The current conditions present a rare alignment for maximizing returns on container movements.” shared Christian Roeloffs, cofounder and CEO of Container xChange, an online global marketplace for container trading and leasing.
Market Outlook
Stabilization in Prices: Container prices in China have reached a plateau, reflecting a balancing of supply and demand.
Opportunities for Arbitrage: With declining pickup charges and stable container prices, there is an opportunity for traders to acquire containers at favorable rates and transport them to regions with higher selling prices, such as the U.S.
Geopolitical Factors: The ongoing geopolitical tensions in the Middle East and uncertainties surrounding the U.S. elections are likely to maintain demand for containers, providing steady trade flow opportunities for Chinese exporters.
While the Chinese container market is experiencing price stabilization, container traders can still benefit from repositioning containers to high-demand markets. The coming months will be crucial for observing how geopolitical and macroeconomic factors impact global container flows.