Markets/Trades

Total 158 Posts

Markets

To hedge the freight rate volatility

Option for those wanting to hedge against volatility in container shipping freight rate: CoFIF (Container Freight Index Futures)'s Asia-Europe contracts are trading at something (in $/40'dry) like $2400 for April, $2250 for June, $2147 for August and $1900 for October (our estimates) while liners are offering $3500 for annual contracts while spot rates at the moment is racing up t $5000 or above. Frankly no one know for sure where the freight rates will be in April through October. They could

Markets

FE-North Europe capacity crunch to hit in weeks 5 and 6

Week 1 capacity to North Europe was higher than normal with bunching departures on 2 OCEAN Alliance services (NEU6 and 7) and 1 THE Alliance service (FE2) lifting overall capacity to 344,710 teu compared to an average of 284,180 teu in December. Overall capacity will drop from week 2 onwards with severe shortfalls expected in weeks 5 and 6 when capacity drops to 240,700 an 126,700 teu in those 2 weeks when demand will be strong due to the pre-Chinese New Year cargo rush. Although the weekly cap

Markets

Liquidation For 2nd Week Despite Strong WoW Price Moves

CoFIF contracts surged in the first 2 trading days of 2024 and traded limit up to their maximum daily caps before softening in the next 3 trading days as the market awaits further signals from the SCFIS. Traders continue to prefer longer dated contracts, indicating a growing consensus that the Red Sea diversion may drag on. Open interest fell for the 2nd week in a row to just half of the peak on 22 December. This week’s trading will be driven by the latest SCFIS assessment on 8 January for the

Markets

80% of all containerships on Suez route have diverted to the Cape of Good Hope

The number of containerships that has been diverted from the Suez to the Cape route has reached 354 ships since 15 December 2023, accounting for 80% of all the ships moving between the Atlantic/Med basins and the Indian Ocean. The number will continue to grow over the coming week with most of the main carriers currently opting for the Cape route. Only CMA CGM and a small number of niche carriers operating in the Asia to East Med and Baltic markets that have continued to use the Suez route with r

Markets

SCFI up 40% WoW to Close 2023

Transpacific freight rates have risen in tandem with European rates last week, rising to $2,553/feu to the West Coast and $3,559/feu to the East Coast, both breaching their 12 month highs. Capacity is expected to remain tight in the coming weeks, with reduced departures available in January especially on the US East Coast routes where the diversions to the Cape route will start to have an impact from week 3 onwards. Carriers are also switching ships away from the US West Coast to Europe where t

Markets

Maersk resumption of Suez transits drag down CoFIF

CoFIF’s April contracts (EC2404) soared to a new high on 27 December but retreated on the last 2 trading days of the year to close at to 1,643 as the traders unwinded some of their pairs (long EC2404 and short EC2412). Market conviction weakened with Open Interest balance dropping through the week to end down by 50% WoW, with Maersk’s decision to resume Suez transits earlier last week dragging down the forward expectations. The latest SCFIS assessment on 1 January for the Asia-North Europe rout

Markets

Red Sea crisis to keep freight rates elevated through February

The number of containerships diverted to the Cape Route has reached 262 ships as at 31 December 2023 with a total capacity of 3.4m teu or 12% of the global capacity. Apart from ships diverted from the Suez route, there is also an increasing number of ships diverted from the Panama Canal to avoid the Canal congestion. With the crisis hitting Europe rates the hardest, European carriers have taken a divergent approach with Maersk and CMA CGM resuming Suez transits as of last week while MSC and Ha

Markets

AE rates up sharply

Transpacific freight rates have latched on to the Red Sea turmoil and the expected shortage of capacity in January especially on the East Coast services which have been affected by the Panama Canal restrictions as well as the Suez diversions to the Cape route. Rates to the West Coast have not gained as much in comparison, with capacity still open on all corridors as existing WC capacity is not affected by the Suez diversions, although carriers could still shift some capacity to Europe on accoun

Markets

Banner week in CoFIF

Maersk’s statement over the weekend that it is planning to resume Red Sea transits sent both liner equities and forward CoFIF contracts into retreat on 25 December after a banner week for both markets last week. CoFIF futures for April surged by 55% last week while daily turnover averaged nearly $4.9bn and Open Interests reached $2bn. The latest SCFIS assessment on 25 December on the Asia-North Europe route surged by 21.7% following  its 5.4% rise the week before. The SCFIS, which is the underl

Markets

Capacity crunch looms as diversions from the Red Sea hit record high

The number of containerships diverted from the Suez to the Cape Route has surged to 125 units compared to 44 a week ago, including 16 ships that turned back in the Red Sea to the Med after making their southbound Suez passage. The record number of diversions far exceeds the number of ships that were diverted during the EVER GIVEN incident on the Suez Canal in March 2021 when less than 20 ships were diverted. While the previous Suez blockage in 2021 lasted barely 7 days, the impact of the current

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