Markets/Trades

Spot rates to Europe have risen above their January peaks with momentum continuing to be strong given the current tight space situation with further rate hikes expected in the coming weeks. Week 22 saw just 6 out of 11 Asia-North Europe sailings depart on schedule the congestion at Singapore and Tanjung Pelepas has severely disrupted the market. Overall capacity utilization remains very high while forward capacity forecasts for June with continued delays arising from congestion, which will redu

The SCFIS index to North Europe gained a further 12.8% to reach 3,799 on 3 June 2024, further narrowing the gap between current spot rates and the CoFIF Asia-North Europe freight futures’ EC2406 and 2408 contracts which are now trading at a 10% premium to the current SCFIS. The prices for these 2 contracts with the earliest expiry dates slipped marginally last week on lower traded volumes, with the market lacking fresh directions. The June and August futures rates are now on par, which suggests

What is CoFIF? o INE Container Freight Index Futures (CoFIF) are a type of futures contract traded on the Shanghai International Energy Exchange (INE). Where is CoFIF traded? o The Shanghai International Energy Exchange (INE), an associated company of the Shanghai Futures Exchange; the two are operated and managed by the same management team. o The INE is regulated by the China Securities Regulatory Commission (CSRC) and serves as every trader's ultimate counterparty. All trading profits and lo

Asia-North Europe freight futures surged to a new record high with the August 2024 CoFIF contract (EC2408) closing at 4,313 on 27 May but daily trading volumes dropped as traders waited for the next catalyst. Open interests ended the week relatively unchanged in number of lots but stand at a record high in dollar value due to the rise in prices since 9 May. Capacity utilization on the Asia-North Europe route has come off slightly from their recent high but this has not dampened freight rates wi

The CoFIF container freight index futures traded at a new hight in volatile trading last week. Initial concern that CMA CGM’s resumption of Suez transits on one of its Asia-Med strings (see page 20 Weekly News Briefs) could trigger a response by its rivals proved to be unfounded, while the Shanghai Futures Exchange’s action to enforce the position restrictions to ring-fence speculative activities did little to dampen trading volumes as average daily turnover reached $3.5bn. Open interests are do

CMA CGM was reported to have fixed the 7,092 teu newbuilding TS DUBAI at a very strong $80,000 per day rate for 3 months, setting a new rate benchmark. Momentum picked up further last week as demand remains red hot while supply of prompt units of over 2,000 teu remain very tight. The sharp rise in freight rates will fuel the charter market in the next 8 weeks with no room for rates to drop. MSC has taken delivery of 2 more ships in the resale market last week although both ships were previously

With container equipment currently in short supply, the production of new dry container equipment has surged since the end of last year. New dry box production surged to 520,000 teu in April alone, 3 times higher than the 2023 monthly average with new factory production fully booked until the end of July. New box production expected to exceed 4m teu this year compared to 1.97m teu in 2023. The record production year was in 2021 when more than 6m teu of new boxes were delivered.

CoFIF freight futures to North Europe rallied sharply last week on the back of the sharp spot rate hikes driven by the current shortage of capacity on the trade. Effective capacity to North Europe is down 5.1% despite having 17.8% more in total vessel capacity deployed compared to a year ago, with the longer route via the Cape of Good Hope taking away almost 23% of the effective capacity. The SCFIS increased by 13.7% on 13 May to reach 2,512 with further increases expected over the coming weeks

The bullish container freight and charter markets continue to gain ground with carriers pushing for further rate hikes through May while demand for ships remain unabated. Over-capacity concerns are on the backburner with containership diversions to the Cape route effectively removing more than 7% of the total fleet. New tonnage requirements have shifted to the Mexico and Middle-East/Indian subcontinent markets, with 3 new services to Mexico launched in May alone by COSCO, CMA CGM and MSC while M

Containerships are still making transits on the Suez/Bab-el-Mandeb despite heightened risks following the collapse of ceasefire talks between Israel and Hamas and the escalation of the Houthi attacks on commercial shipping on the Red Sea which has widened to the Indian Ocean. Over 90 transits on the Bab-el-Mandeb has been recorded since 1 April 2024, mainly by smaller carriers operating in the Asia-Med and Baltic Sea routes, compared to over 700 voyages diverted to the Cape route in the same per