SIMIC

CHAIRMAN and CEO of the world's largest container manufacturer, China International Marine Containers (CIMC), Mai Boliang expects demand for new containers to be muted, at just 20 per cent of that in conventional years.
Mr Mai was speaking at a briefing last week to announce CIMC's 2022 results, which showed net profit fell by 52 per cent year on year to US$466.55 million, as the container shipping market normalized.
Overall revenue fell by 14 per cent to $20.51 billion, as turnover from container manufacturing fell 31 per cent to $6.62 billion, according to Container News.
Sales of dry containers fell 56 per cent from 2021, to just over 1.1 million TEU in 2022, while reefer sales declined by 11 per cent to 131,400 TEU. Net profit from the container manufacturing business contracted by 55 per cent to $762.03 million.
Mr Mai said: "In 2022, the global economic and trade growth momentum weakened due to factors such as inflation and significant interest rate hikes in Europe and the US." However, he attempted to downplay the reduction of earnings and sales volumes, pointing out that 2021 was an exceptional year, and the drop in profit and sales figures was off a high base.
"The container business is mainly affected by the variety of dry cargo containers, and the demand in the first half of the year is only 1/5 of that in conventional years, "he said, adding that he expects container demand to recover in 2H 2023, as US retailers resume stockpiling.
"Global trade remains slow, while China's economy is still recovering after the (Covid-19) pandemic," explained Mr Mai. "However, container prices have stabilized at just over $2,200/TEU, and we expect prices to go up as demand recovers."
Mr Mai also observed that in recent years, more manufacturing has relocated from China to Southeast Asia, but does not foresee a big shift for container manufacturing in the near term, although container factories have opened in Vietnam.