The freight futures market in China shifted from being strongly bearish at the beginning of last week to showing a clear lack of interest now. The recent uptick over the past few trading days was driven partly by reports of increasing port congestion in Europe, but was mainly the result of short sellers closing out their positions. Trading volume today dropped by 40,000 contracts for the first time since April 2024.
Benchmark contract EC2508 dropped 7%, with the bulk of the decline coming in the afternoon session. Open interest rose by 4,279 lots, pointing to heightened conviction among short sellers. This sharp fall stands in stark contrast to recent moves by shipping lines, which have lifted near-term freight rates for the first time in weeks. MSC, for example, reversed course overnight, increasing its quotation from $2,640 to $3,240 per FEU. The only bearish signal overnight was a drop in vessel utilisa
Maersk’s spot rate of $3,400 per FEU for shipments departing on July 3rd, published in the afternoon of June 17th, elicited only a muted response in the next day ( June 18th): the EC2508 contract rose by a modest 3%, amid considerable liquidation that pushed open interest below 90,000. This morning (June 19th), MSC went further by slashing its rate for June 30th departures to just $2,640 per FEU—even as it maintained a July FAK rate of $4,092 per FEU. The sharp cut for near-term shipments sent
The freight futures market opened lower today but is slowly recovering, buoyed by anticipation of Maersk’s July shipment quotation. Released at 14:30, Maersk’s rate of $3,400 per FEU is significantly below CMA CGM’s $4,645 but still $500 higher than its offer for shipments leaving end of June. Vessel utilisation has improved modestly, though it remains well below the highs seen at the same time and November last year, and January this year.
EC freight futures failed to retain the initial gains following Israel’s attack on Iran on 13 June with prices closing lower on 16 June as the market continues to assess the impact of the rising tensions in the Middle East. The prolonged closure of the Red Sea and higher fuel costs are expected to lead to keep freight rates elevated, the prospect of a blockade of the Strait of Hormuz could leave up to 3.4% of global container volumes stranded. Trading remained subdued throughout the past week a
It was a busy day as Israel launched an attack on Iran, which many freight futures traders interpreted as a buy signal. Traders have become conditioned to view any conflict as potentially positive for container shipping freight rates. The rally began with longer-dated contracts, fueled by expectation that liners will have to postpone their return to the Red Sea. Later, the main contracts, EC2508 and EC2510, gained momentum on expectations of increased fuel surcharges, which would be added to the
Freight futures in China surged shortly after market open, following news of Iran’s threats of retaliation against Israel—a development that raised expectations of a delay in liners returning to the Suez route. However, short sellers subsequently entered the market and drove down futures prices for most of the day. Despite this, longer-dated contracts ended the session higher, supported by increased open interest.
The sharp correction in freight rates on the Far East–West Coast North America route since June appears to have deflated pricing on the Far East–Northern Europe route as well, where vessel utilisation has remained lacklustre. With the prospect of $3,000 per FEU before July now in doubt, shipping lines are once again trimming rates for the next fortnight. The futures market is just moving side way at low trading volume.
The North Europe SCFIS published after market close on 9 June rose by 29.5% to 1,623 points but remains 20% below the last EC2506 closing price which had risen by 6% over the past week in anticipation of the gains with carriers still eyeing another attempt to raise rates in mid-July. Open interest remains elevated at 7,803 contracts with just three weeks to expiry and could face selling pressure if the mid-July rate hike flops. Futures contracts for August-December traded sideways with no new c
The futures market is not satisfied with Maersk quoting $2,800 per FEU for the Shanghai to London route, which is above traders’ expectations. EC2508 closed today 2% below yesterday’s closing price. The liners’ decision to slash their quotations for the FE-WCNA route, along with both CMA CGM and Hapag-Lloyd lowering their rates for near-term FE-NEUR shipments, are red flags for traders.