Total 455 Posts
The container shipping industry has reached a pivotal point this year in the application of freight futures as a hedging tool. Major players are starting to act, rather than avoiding or merely considering the use of freight futures. The freight futures products are ready, and more options with potentially even better designs will be available soon. There are already two freight derivatives products in operation. One is the SCFIS (Europe) Futures Contract (EC) listed on the Shanghai Internationa
The trading volume is drying up, with open interest holding up only because of the hotly contested EC2510 contract. There is no sign yet of traders willing to roll over their EC2510 positions into longer-dated contracts. If the bears are correct, volumes will fall sharply once the October contracts expire, creating a difficult environment for the launch of two additional futures products—one on ICE based on the NYSHEX index and the other on Euronext based on the Xeneta index. For the first time
No one was willing to make a move today, as all eyes are on what Maersk will offer for late-September shipments. With no fresh news to set the tone, most contracts moved higher on traders’ concerns that the market may have already bottomed. Trading volume was light today but open interests edged up by 927 contracts. As of the time this note was published, Maersk’s new offer had still not surfaced. However, after market close, OOCL posted a rate of $1,650 per FEU—down another $200 per FEU, which
The containership charter market shows no signs of cooling down despite the weakness in the freight market, as charter rates retained their recent strength. Open units continue to be snapped up quickly including several sublet candidates. CMA CGM was the most active charterer in the past week, including a sublet of the 5,527 teu ESL OMAN for up to 3 months at $62,000 per day with delivery scheduled for 30 September. MSC continues to focus on second hand purchases with 2 more resale units joinin
MSC announced its Golden Week blank sailings program at the start of last week, triggering a brief double-digit jump in EC futures prices and lifting daily trading volumes above 100,000 contracts for the first time since mid-July. However, open interest hovered at only 80,000 contracts with traders reluctant to hold large overnight positions. The much-anticipated Gemini announcement of its own blank sailing plan on 4 September disappointed with just a single sailing removed in October. Average
The Asia-North Europe rate slump received no respite after carriers abandoned the 1 Sept rate push and allowed rates to fall further as the SCFI rates dropped by 9.5% to $2,096/feu while the SCFIS fell by 11.7% in its sharpest weekly drop since February. Carriers’ reluctance to remove surplus capacity continues to be the bane of the market, with the limited Golden Week blank sailing program in early October a further sign the lack of discipline. Gemini carriers in particular will take out just
The futures opened higher on Maersk's blank sailing announcement but reversed course through the morning as traders judged that the blankings would not be sufficient to halt the spot rate decline. Bottom fishers then entered the market before HMM’s rate cut (from $2,100 to $1,700 per FEU) on next week’s sailings sent shockwaves through the market. Liquidation for EC2510 continued while the open position for EC2512 remain depressed.
The idle containership fleet continued to creep upwards to reach 148,000 teu or 0.5% of the total fleet this week, driven entirely by the redelivery of 15 of SeaLead’s OFAC sanctioned ships that has added 67,400 teu to the idled fleet capacity after they completed cargo discharge. SeaLead has confirmed that it has permission from OFAC to load empty containers from the Med on one remaining 6,882 teu ship that is currently making its way back to Asia. SeaLead has not been able to replace these re
Asia-Europe freight rates continued to slide, with both the SCFI and SCFIS indices recording accelerated declines. Carriers have largely abandoned any hopes for a September rate push, and are shifting their attention to filling their ships and building up cargo roll pools ahead of the Golden Week holidays in October. Carriers have only themselves to blame for their current predicament given the total absence of capacity withdrawals necessary to arrest the declining freight rates. Their willingn
Freight futures listed in Shanghai extended their decline from the final hour of yesterday’s session (2 Sep), as traders began to question whether MSC’s blanking of four voyages would be enough to offset the expected volume dip in the first half of October. In the physical market, however, liners continue to cut quotations for September FAK shipments, with Gemini operators reducing their offers to USD 1,650–1,700 per FEU. Trading volume fell sharply from yesterday’s 117,491 contracts to 40,534