Red Sea disruption pushing up container values and rates

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 vs. Q1 2023.
However, the latest forecast from Veson’s Market Outlook predicts that, despite the ongoing conflict, as more and more Container newbuildings hit the water, vessel supply will continue to outpace demand and going forward this will put pressure on rates.
MSC show no signs of slowing down with their Container buying spree of the last few years, accounting for almost a quarter of all Container sales reported so far this year. Notable benchmark sales include the Post Panamaxes Buxcoast (6,892 TEU, Aug 2001, Daewoo) and the Buxcliff (6,892 TEU, Jun 2001, Daewoo) which sold for USD 22.5 mil each in an en bloc deal, VV value USD 20.01 and USD 19.95 mil respectively. Also in March the sub Panamax Odysseus (2,824 TEU, 2006, Hyundai Mipo) also sold to MSC for USD 15.9 mil, VV value USD 13.61 mil.
Source: Veson Nautical