Total 160 Posts
Speculative traders returned to the CoFIF market last week with average trading volumes doubling compared to the week before. Prices for longer dated contracts for June 2024 through February 2025 rallied. The EC2406 and EC2408 contracts rose above 2,500 compared to the latest SCFIS index at 2,135, implying an expected increase of over 17% from current rate levels. Market conviction on the May rate hikes have strengthened with several carriers pushing for higher FAK rates backed by improved vess
Transpacific contract rates for smaller BCOs are settling at the 1,600-1,700/feu level to the US West Coast, which are $200-400 higher than the rates done for larger BCOs. These rates are also 10-20% higher than average contract rates for the 2023-24 season but are substantially lower than current spot market rates of $2,800 to 3,100 per feu which will provide incentives for other BCOs to accept higher contract rates. Several carriers have filed for a fresh round of rate increases from 1 May o
The United States Trade Representative (USTR) initiated an investigation on China’s maritime, logistics, and shipbuilding sectors on 17 April 2024 based on the petition filed by 5 US labor unions that alleged unfair policies and practices to undermine fair competition and dominate the market. Amongst the proposed remedies to address China’s dominance is a fee on vessels built in China that dock at US ports. Although containerships built at Chinese shipyards account for only 27% of the current f
The seizure of the 14,952 teu MSC ARIES by Iranian special forces on 13 April 2024 off Fujairah has placed heightened risks on Israeli-linked containerships trading in the Strait of Hormuz. However, the Israeli owned fleet accounts for less than 2% of all containerships in the Persian Gulf and their redeployment to other routes is not expected to cause significant disruptions to the trade, barring a full blockade of the Strait of Hormuz if the Israeli conflict escalates. Out of over 500 contain
Asia-North Europe freight futures rallied on 15 April with longer dated CoFIF contracts (covering June 2024 to February 2025) recording strong double digit % gain. Traders are building long positions with the escalation in the Middle East conflict expected to extend the Suez diversions. The extended voyages have kept Asia-North Europe capacity in check, with effective capacity falling by 3% YoY in spite of the additional 23% capacity that has been deployed on the route. Although carriers failed
The easter holidays and Ching Ming holidays has not dampened charterer interest, with charter rates are still rising over the past week. Open interest for prompt deliveries remain high especially for the larger sizes where availability is limited. Hede Shipping completed the charter of the 4 ships it needed for the newly launched Hede Direct Service connecting Shanghai and Los Angeles – the 3,426 BFAD ATLANTIC ($22,000 for 12 months), 1,809 teu ANDROKLIS ($15,750 for 6 months), 4,298 teu REN JI
The Containerized Freight Index Futures (CoFIF) traded on the Shanghai International Energy Exchange (INE) is the second attempt by China to build its container freight futures market. Unlike its predecessor, called the Container Freight Derivatives (CFD) that was launched in June 2011 by the Shanghai Shipping Freight Exchange Co., Ltd. (SSEFC) and only available to domestic on-shore traders, CoFIF is accessible to off-shore traders outside of China. Initial CFD trading saw high daily turnover
The longer dated CoFIF contracts rallied last week with traders building long positions after several carriers pushed for another Asia-Europe FAK rate hike in mid-April. Despite continued liquidation, prices for EC2404 contracts that will expire in 2 weeks were unchanged at 2,120 and remains slightly lower than the SCFIS rate at 2,174 last week (before settling slightly lower at 2,172 based on the latest assessment on 8 April). The latest CoFIF rates implies April-August rates that are equivale
Short covering on the first freight futures that will expire on 29 April kept EC2404 prices up, although futures contracts for rates expiring after April registered small declines. Traders liquidated another 37% of their positions to cut the open interests (OI) for EC2404 from 11,899 lots to 7,511 lots. The EC2404 open interest peaked at 134,537 on 22 Dec 2023 and has been sliding since then. At 7,511 lots, the open interests for EC2404 amounted to some $110m. Since only the losses/profits of th
Transpacific rates continue to fall sharply, with increasing pressure on carriers to lower their contract rate offers. The gap between current spot rates and asking rates for the new 1 May 2024 contracts remain very wide, with the majority of contracts still not concluded. After failing to push through the 15 March GRI, carriers are also facing similar resistance to the 1 April GRI of $1,000-2,000/feu with the low market conviction that the hikes will stick. Although Transpacific freight volume