COSCO Shipping Development sees fluctuating box market as sales, leasing revenue down

BEIJING : COSCO Shipping Development (CSD), the holding company for Dong Fang International Container, the world’s second-largest container manufacturer, said that net profit fell 35% year-on-year to US$568.57 million in 2022.

Container sales fell 42% to 958,900 TEU, and revenue from container leasing, which is conducted through another subsidiary, Florens Asset Management, was down 9% to US$787.93 million.

The management expects demand for containers, both for purchase and leasing, to fluctuate this year as the container shipping market normalises.

CSD said, “As the supply chain gradually returns to normal, some empty containers will flow back to the market, which to a certain extent, affects the rental demand of shipping companies, and the overall market demand has slowed down. The overall container rental level in 2023 will fluctuate due to the impact of future market supply and demand. In the long run, under the influence of factors such as the demand for container allocation and the renewal of old containers with new market capacity, the demand for container leasing will gradually return to a stable situation.”

The company acknowledged that global economic uncertainties persist in 2023 and will affect demand for new containers.

CSD noted, “The container manufacturing market is still facing challenges such as inflation in overseas economies and a decline in the growth momentum of export trade, and overall demand will slow down. However, the market still maintains a supportive foundation and resilience: the demand for renewal of old containers, shipping companies with new capacity will increase their inventory of new containers, and growing demand for diversified special containers will promote the gradual formation of a new balance in the future container market.”

Linerlytica observed that the three listed container manufacturers’ (China International Marine Containers, CSD and Singamas) combined dry container output halved year-on-year in 2022. CIMC, CSD and Singamas produced around 2.2 million TEU in 2022, compared with a record 4.4 million TEU in 2021.