Container Market Report December 2019

    We held the seminar of Thermo King products of Magnum Plus, Super Freezer and Generator on 2 days, Dec. 2 (Mon), 3 (Tue) at Naha in Okinawa which was our long-cherished dream. On Dec. 3 (Tue) many staff of Ryukyu Kaiun Kaisha (RKK) including their group companies participated in the lecture in the morning and operating Super Freezer cooling down to -60 degrees Celsius in the afternoon, which they bought before. The both days’ seminar was successful so that Mr. Horece Lao of the technical section of Thermo King was so happy. At the same time RKK bought a big number of Magnum Plus from us. I appreciate their highly wise decision and judgment. I think RKK is running at the top of Japanese costal shipping lines. In view of geographical advantage of Okinawa I think the future of Japan should rely on them. Okinawa could become Singapore. I want continuously to watch development of Okinawa.
    It is December 15 that the United States takes 15% of additional duty for the 160 billion dollars against products from China such as smartphones to China as a time limit. Additional duty is imposed to all products from China when it becomes the enforcement. In addition, President Trump expressed that USA would impose additional duty on steel and aluminum from Brazil and Argentina. On the other hand, USA will examine 100% of sanction duty for 63 articles of French products, which is approx. 2.4 billion dollars as French discriminates against American IT companies.
    As a result of U.S. and China friction, the world manufacturing industry lose force in business performance. GM closed 3 factories in USA. They will close total 7 factories and reduce 14,000 people in the world. Other makers will plan rationalization to reduce 12,000 by Ford, 12,500 by Nissan, 8,000 by Volkswagen.
    According to November employment statistics in USA the number of the employees of the non-agriculture section greatly exceeded the expectation of 185,000 people in 266,000 people. Unemployment rate, 3.5%. Hourly wages is $28.29. The ratio maintains 3.0% from January through November in comparison with the previous year. It supports steady continuation of the individual consumption.

    The American retail association announced movement of the container for retailers. January 2020 is 1.87 million TEU which decreases by 1.2% from a year earlier, February, 2020 is 1.62 million TEU, decreases by 0.3% and March 2020 is 1.84 million TEU by reaction of the lunar New Year. The import of USA is considered to gently slow down by USA and China trade friction.
    On the other hand, the crude steel production in October of 64 countries and areas of the world is consecutive minus for 2 months at 151.49 million tons, fell 2.8% from the same month a year ago according to World Steel Association. Therefore, the steelmaker begins to perform production adjustment by a decrease in production, the stop of facilities. The business results of the Chinese steelmaker are getting worse, too. They have been stimulating by industry reorganization like Baoshan Iron & Steel investing to No. 6 largest Shougang Group. However, the price of iron is up to China as the new steel production facility in coast of China raising production capacity will plan operation in 2020

    In spite of the loading capacity reduction measures of the shipping lines some shipping lines started reducing the freight rate to fill the space over 90% of the capacity of ship in European route and the North American route, it followed that the spot freight rate fell. I would like to dare to say to sales staff to concentrate on raising the freight rate instead of filling the space with all their power. It is a shortcut of the profit improvement of each shipping company.
    The waiting ships is 1, 324, 168 TEU as of Nov. 25. It became the largest record of this year. The number of 83 wait ships with 830,000 TEU capacity for the scrubber construction are to occupy 63% of whole wait ships.

    The new container price in China is $1620 per 20f which decreased $60 per 20 by 3.6% from the previous month and it is weak sequentially. The factory new container stock in China is 915,318TEU (Dry: 915,256 TEU, Reefer 60,066 TEU). It decreases 4.2% in total less than the previous month.
    The operation rate of container leasing company has been pressurized lower so that many leasing companies increase depot stock including China.

    EF international enters in 11th year by the next year. EFI treats the agency of 8 overseas companies and each of them has greatly grown up. EFI counts 20 best staff. The sales of this year would be able to achieve 2 times of the last year, too. I deeply appreciate the customers who have been supporting EFI. Furthermore, EFI refresh a heart and challenge in 2020 as container professional group working hard each other in order to meet the expectation of the customer. We hope that EFI could have the support of all of you sequentially.

    We wish all of you the year of 2020 to be one of the best years.