Since the year began, container prices have increased dramatically in practically every industry and age group.
After a prolonged period of deterioration during which the sector’s values slowly decreased after hitting a record high at the end of Q1 2022 during the container boom. But since January 2024, prices have turned around and older boats have showed the greatest strength. For example, values for 20-year-old 1,750 TEU Handy Containers have increased by up to 43% since the start of the year, from US$6.99 mil to US$8.6 mil.
Figure 1: Growth in Container prices by sub-sector since the year’s beginning
Growing earnings since the year’s beginning have bolstered the value increase. For instance, in the Handysize sector period, incomes increased by c.39.4% over the course of a year, from US$9,280/Day on January 1, 2024, to US$12,940/Day as of right now.
This is mostly because of the continuous disturbance in the Red Sea. Vessels are traveling farther by rerouting around the Cape of Good Hope, which reduces the number of accessible vessels and raises fares. Container voyages passing around the Cape of Good Hope have surged by almost 200% in Q1 2024 compared to Q1 2023, per VesselsValue trade data.
Nevertheless, despite the ongoing disagreement, the most recent Veson’s Market Outlook forecast indicates that as more and more new container buildings are built, vessel supply will continue to exceed demand, which will eventually put pressure on pricing.
With nearly a quarter of all recorded container sales so far this year, MSC shows no signs of slowing down from their recent buying binge. The Post Panamaxes Buxcoast (6,892 TEU, August 2001, Daewoo) and the Buxcliff (6,892 TEU, June 2001, Daewoo) are two notable benchmark sales examples. They both sold for US$22.5 mil in an en bloc agreement, with respective VV values of US$20.01 and US$19.95 mil. Additionally in March, MSC purchased the sub-Panamax Odysseus (2,824 TEU, 2006, Hyundai Mipo) for US$15.9 mil, with a US$13.61 mil VV.
