News / CIMC reports soft demand for new containers, but eyes recovery in 2024

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Container demand is expected to be muted this year as freight rates continue heading south, according to China International Marine Containers (CIMC) chairman and CEO Mai Boliang.

However, at the company’s AGM last week he also predicted that, with periodic renewal, container demand would improve in 2024.

Mr Mai, who leads the world’s largest container manufacturer, said few new containers were on order this year, so increased scrapping of old boxes could mean demand would recover next year.

The meeting was two months after CIMC disclosed that Q1 23 net profit had plunged 90% year on year, to $23.8m, as sales of dry containers fell 77% to 82,500 teu, reefer sales were down 63%, to 12,100 teu, and sales of special containers had fallen 13%, to 66,100 units. In 2022, CIMC’s net profit halved, to $466.52m.

Mr Mai cited BIMCO’s container shipping market report, released on 30 May, that said box volumes on head-haul and regional trade lanes would reach 185m teu in 2024, 7% higher than in 2022, while the International Monetary Fund predicts global economic growth of only 2.8% this year and 3% in 2024.

Avoiding over-dependence on containers, CIMC, which is also active in shipbuilding, has been diversifying into the clean energy segment, said Mr Mai.

And, in response to shareholders’ questions, Mr Mai said no decision had yet been taken about opening factories in countries with lower manpower costs, such as in Vietnam and India.

He said: “In the long run, world trade is moving from China to South-east Asia, Africa and even South America. We’re paying close attention to market dynamics and constantly intensifying our research. No matter how the market changes, CIMC’s position in the global container industry will not change.”