Global container production down 71% in Q1 2023

The production of sea standard 20-foot containers in the world decreased in the first quarter of 2023 by 71% compared to the same period last year, amounting to about 306,000 units. About it writes the Financial Times newspaper, citing data from the specialized consulting company Drewry.

Even two years ago, the production of containers was rapidly developing due to a sharp increase in demand for goods during the pandemic, the newspaper notes. In 2021, a total of 7.1 million containers were produced, twice as many as a year earlier. The easing of covid restrictions and the recovery of the global economy has led to a slowdown in demand for exports and an oversupply of containers in Chinese ports, where up to 95% of their total is produced.

The decline in global demand hit manufacturers hard. Thus, the profit of one of the largest Chinese profile companies China International Marine Containers decreased in the first quarter immediately by 91% in annual terms, to $23 million, with a decrease in sales by 77%. Cosco Shipping Development’s profit fell 71% to $56.4 million.

According to World Trade Association (WTO) economists, the growth of international trade in goods in 2023 will slow to 1.7% from 2.7% a year earlier, which means that weak demand for containers is inevitable, the newspaper points out.

The current situation has led to the fact that port owners throughout the Asia-Pacific region are now forced to look for a place to store the accumulated unused containers. At the same time, a significant part of them are cubic 40-foot containers, which is explained by weaker demand on the Asia-US and Asia-Europe routes, where they are mainly used.

How reported Earlier, WTO analysts in their April report “World Trade Outlook and Statistics”, in 2024, global trade growth should recover to 3.2%, but this could be prevented by a number of risks. These include geopolitical tensions, disruptions in food supplies, and the unintended consequences of monetary tightening.

At the end of 2022, the growth of world trade turned out to be weaker than the October WTO forecast (3.5%) and amounted to 2.7%. This was due to a sharper-than-expected decline in the fourth quarter amid rising commodity prices, monetary tightening in response to inflation, and the impact of local COVID-19 outbreaks on manufacturing and trade in China.

Analysts expect the growth of real world GDP in 2023 at the level of 2.4%. Forecasts for growth in both trade and production were below the average for the past 12 years, the WTO noted.