Markets/Trades

INE, the exchange where CoFIF contracts are being traded, doubled the transaction fee for the second time during the last two weeks to 0.02% and cap the trading volume at 500 contracts per day, another attempt to cool the short-term trading activities. Each CoFIF contract is priced as Rmb50 x the SCFIS. So 500 CoFIF contract cap amount to about $2.7mn. Despite being halved, the liquidity remains very high after the new policies kicked in. The transaction fee started at 0.001% at CoFIF's launch

Transpacific rates were largely unchanged over the past week with rates to the West Coast rates remaining firmer than the East Coast but sentiment is improving on both coasts as capacity utilization has been stronger than expected with several extra loaders notably by Maersk being added to cater to the overflow cargo. THE Alliance’s announcement late last week of the withdrawal of the EC4 in November will help to remove the surplus capacity on the East Coast especially on the Suez route which i

Market sentiment has turned positive for the first time since August, with momentum building for the November freight rate hikes as further capacity cuts are forthcoming after THE Alliance decided belatedly to suspend the EC4 service to the US East Coast via the Suez in November. This follows earlier cuts made by various carriers on the USWC and Europe routes that have helped to elevate carriers rate restoration efforts. The SCFI recorded its 2nd successive weekly increase, led by gains on the M

CoFIF trading stays red hot despite of the continuous decline in the FE-NEUR spot rates. Prices for all 5 CoFIF contracts were down 5-7% WoW but the CoFIF were still trading at 20-40% premium to the spot. Trading volume made new high on Friday with close to 500,000 contracts changed hands despite the exchange doubled the transaction fees on Thursday. It is the second time in less than 2 months that the INE has increased the transaction fees. The turnover-to-OI ratio now stayed high at 5x as th

Liners are pushing for GRIs in November. But following their recipe in June i.e. to cut down on the capacity, they are going to increase their capacity as shown by Linerlytica's Capacity Watch. Save for FE-FE-NEUR trade, the main west-east trades will see capacity increase by 9-22% MoM in November: FE-WCNA weekly capacity will increase by 22% MoM in NovemberFE-ECNA weekly capacity will increase by 16% MoM in NovemberFE-NEUR weekly capacity will decrease by 5% MoM in NovemberFE-MED weekly capac

Charter rates are seeing sharper drops with the start of the winter slack season further pushing down market sentiment while charter periods are also significantly shortened with more flexible delivery periods of 1-6 months being reported. Idle tonnage is starting to build up again but the pace of idling is still slower than last year, with most of the larger ships due to return to service by November. However, the build up of surplus tonnage is starting to bite with even MSC forced to idle

The impact of the EU Consortia Block Exemption Regulation (CBER) expiry on 25 April 2024 on the liner shipping market has been overplayed by the carriers and their detractors. Of the 43 consortia that operate in the European Union in 2020, only 13 actually qualify for the block exemption while the remaining consortia exceeds the 30% market share ceiling including each of the 3 global alliances (2M, OCEAN Alliance and THE Alliance). The removal of the CBER will not impact existing alliance arra

Transpacific rates to the US West Coast enjoyed a minor rebound last week, on the back of strong e-commerce cargo demand after the Chinese Golden Week holidays coinciding with reduced capacity availability due to blanked sailings with week 41 capacity more than 40% less than usual. East Coast rates remained under pressure but the rate of decline has slowed due to reduced capacity availability. But more space will return in November, with current projections showing a 22% increase to the West Co

It should have come as a surprise to the liner managers in the container shipping industry is that the CoFIF has been rallying since China is back from its national holidays. As the liner managers are struggling to sell $1,000/FEU to their customers in current round of 2024 contract negotiation. There are buyers in CoFIF markets willing to pay something like $1,300-1,500/FEU for shipments embarking between April and December next year. But most of the liner managers do not know CoFIF. The two

Charters rates are falling steadily with further declines expected over the coming weeks with vessel availability rising faster than the market can absorb. There are more than a dozen newbuildings of up to 3,000 teu scheduled for delivery in the coming 3 months that remain open for charter, putting further pressure on an already over-supplied market. Charter rates have slipped across all sizes including the larger sectors of over 4,000 teu where there is an increasing build up of surplus ships.