Container prices ease as China resumes activities post the Golden Week

Container prices ease as China resumes activities post the Golden Week
At different ports in China, the average trading prices have declined

The average standard container prices in China have plunged for both trading and leasing as Golden Week concludes in China, according to data published by Container xChange.

Since week 39, just ahead of the Golden week, the average trading price of 40 ft high cube containers has fallen 22.5% from US$8,516 to US$6,598 in week 42 – the biggest decline witnessed this year in China.

Christian Roeloffs, founder and CEO of Container xChange, said: “We are experiencing improvement in market situation as the one-way leasing charges, spot rates and other freight costs are starting to stabilise and average standard container prices are witnessing a drop for the first time in many weeks.

“Though we are still yet to see how the market responds to further inventory stocking by the US importers in the coming months, these are good signs of market correction.”

Roeloffs noted that, if the prices do not decline further, the drop in prices could also possibly be only a temporary decline because of China’s Golden Week.

At different ports in China, the average trading prices have declined ranging from 1% to 11% for 40 ft high cube containers.

Qingdao recorded the highest 11% plunge from last month while Ningbo recorded 2%, Shanghai 3.4%, Shenzhen 1.7% and Tianjin 0.5%.

The peak average trading price of 40 ft high cube containers peaked in week 27 (first week of July) with a 57% jump.

In Ningbo, average prices for 40 ft hight cube containers peaked in week 38 (September) at US$7,184 and have been falling every week since and now stands corrected at US$6,803 in week 41 (a decline of 5.6%).

Further market price correction is most likely expected as this rate is still far from US$5,580 in week 27.

The average price of a 20 ft high container has plateaued, costing on an average US$3,000, since the beginning of September from US$3,017.

Additionally, the average prices have reduced from the last week at Shanghai Port (from US$,3359 – US$2,847), Qingdao Port (from US$2,982 – US$2,794) and at Ningbo port from US$4,300 to US$3,940).

Container xChange’s data showed that 46 ports globally experienced a moderate pullback in average container prices and the hotspots include China, Vietnam and the US.

All these price falls indicate improvement in congestion which caused sky-rocketing freight costs all over the world.

Dr. Johannes Schlingmeier, founder and CEO of Container xChange, said: “The easing prices show temporary consolation in the global container shortage crisis. There are possibilities that the trend continues because we are halfway through the busiest time for the shipping industry.

“Retailers are looking to pile up stock ahead of the Christmas holidays and the falling prices could well become the new normal from hereon., This could probably be a very early sign of stabilisation of the market.”

The average one-way leasing pickup charges for the China-US stretch are down to US$1,800 from US$2,767 in one week (from week 39 to 40), representing a decline of 35% and the highest recorded this year on this stretch.

Similarly, these rates have also reduced for stretches Ex China to a few ports in Europe (Hungary, Netherlands and Slovakia) and Russian Federation.

The average one-way leasing pick-up charges have slumped from US$3,931 to US$3,621, down 7$, on the China to UK stretch from week 39 to week 40.

Similarly, a 5.4% decline from US$3,646 to US$3,450 was recorded on the China to Belgium stretch during the same period.

While the demand will continue to stay strong as the retailers aim to fill stock ahead of the Christmas holidays, the all-in rates are expected to stay strong too.

Container xChange noted that the situation is more likely to improve by early November and further after the Chinese New Year in February 2022.