HK's Singamas container maker hikes prices in box drought

HONG KONG's Singamas Container Holdings announced a hike of up to nine per cent in this year's prices for boxes amid a shortage of equipment and rebounding global trade volumes.

The price of a standard TEU has risen 50 per cent this year and it may climb to US$3,000 in December, according to comments made by Singamas chief executive officer Teo Siong Seng in a Bloomberg interview.

He warned that the global shortage of container boxes may last for up to two years as manufacturers have to reactivate plants closed during the recession.

"The market is quite tight right now," said Um Kyung-A, an analyst at Shinyoung Securities in Seoul. "Shipping lines have to bring back empty containers from Europe and the US to meet Asia's export demand."

Globally there may be a container shortfall of as many as four million, Mr Teo said. The worldwide box fleet shrank four per cent in 2009, according to Textainer Group Holdings Ltd, the world's largest container-lessor.

Singamas returned its 12 Chinese plants to "desired" capacity in the last two months after hiring new workers from January, Mr Teo said. Last year, the company's output decreased by 85 per cent, prompting it to shutdown factories and layoff staff after suffering its first annual loss since 1996.

"We didn't realise that the shortage would be so acute," Mr Teo said. "Still, it's about time that we were able to have healthy orders at a reasonable price."
(Source:www.schednet.com)