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Red Sea disruption pushing up container values and rates

Container values have risen significantly across almost all sectors and age categories since the start of the year.

Following an extended period of declines, where values fell steadily for this sector after reaching a record peak during the Container boom at the end of Q1 2022.

However, since January 2024, values have taken a turn in the opposite direction and older vessels have shown the most strength, with values for 20 year old Handy Containers of 1,750 TEU up by as much as 43% since the new year from USD 6.99 mil to USD 8.6 mil.

The increase in values has been supported by climbing earnings since the start of the year. For example, in the Handysize sector period earnings for one-year have jumped by c.39.4% from 9,280 USD/Day on the first of January 2024 to 12,940 USD/Day today.

This is largely due to the ongoing disruption in the Red Sea. By rerouting around the Cape of Good Hope, vessels are travelling longer distances, reducing available vessels and therefore pushing up rates.

According to VesselsValue trade data, Container journeys transiting around the Cape of Good Hope have increased by nearly 200% in Q1 2024 as against Q1 2023.

Ships Montly - January 2024

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