Markets/Trades

CoFIF traders took profit last week with near-term contracts gaining favour over the longer dated contracts despite of the 25% jump in the SCFIS index last week. The mood turned bullish again following the Red Sea disruptions over the weekend, which sent all CoFIF contracts to their daily limit up on 18 Dec, forcing a trading halt for the first time since CoFIF was launched in August. Rates are expected to strengthen in the coming week until the Red Sea situation is resolved.

The withdrawal of Israeli owned and operated ships from the Red Sea routes have started, with 42 Israeli-linked ships rerouted away from the Suez over the past 3 weeks. 20 of these ships on the Asia-Med and North Europe routes have been diverted to the longer route via the Cape of Good Hope while another 22 ships have been redeployed to other trades that avoids the Red Sea. Of note, 5 Zodiac Maritime-owned ships of 19,460 teu operated MSC have been redeployed from FE-Europe to the FE-USWC Jaguar

The Panama Canal disruptions failed to stop rates to the US East Coast from slipping last week, with THE Alliance carriers the main casualties from the reduced transit slots. 2M and OCEAN Alliance services are not affected as yet with only minimal delays on their Panama services. East Coast capacity remains sufficient to meet market demand despite  draft restrictions that has limited full container intake for the Panama passage. Rates to the West Coast rose slightly last week but uneven utiliza

For a day last Tuesday CoFIF traders were disappointed about the SCFIS print issued after Monday (5 Dec) close. CoFIF went nearly limit down at the open while bottom fishers helped reduced the daily losses to 2-3% for the day. But starting from Wednesday, news of $3000/ 40’ GRI, several times of the going spot rates, announced by CMA CGM and MSC brought back the animal spirit among the CoFIF traders. By week close the CoFIF contracts were testing their track record high in September. For second

The turmoil at both ends of the Suez and Panama passage have forced containerships to divert from their regular routes, as ships linked to Israeli interests are avoiding the Red Sea passage through the Suez Canal even as some of the neo-panamax ships on the Far East-US East routes are shifting to the Suez route to avoid the congested Panama Canal. While these moves will help to absorb some of the surplus ships, the impact is limited at this stage as it affects less than 2% of the overall fleet.

The rise in the SCFI rates to the US West Coast masks rapidly deteriorating conditions on the route, with utilization levels falling to 81%. The “Express” services have performed poorly including the Zim e-Commerce Express (ZEX) that was only half full on its first 2 sailings following its relaunch in November. Rates to the East Coast are performing better despite a similar drop in capacity utilization, with carriers able to  secure premiums due to the Panama congestion even with transit times

Betting that the Dec 1 GRI may stick and on the hints of the positive SCFI print the Friday before (i.e. 24 Nov) , the CoFIF contracts rallied on strong volume last week. The April and June CoFIF contracts were up 12-19% WoW while the average daily turnover surpassed $1bn last week. The general sentiments among the CoFIF traders: the freight rates already discounted bearish fundamentals while the year end cargo rush and the liners’ incentive to create better sentiment for the annual contracts be

Following the SCFIS’s 8% WoW correction on 20 November, the Asia-North Europe CoFIF forward rates endured consistent selling pressure through last week on relatively thin volume. Open Interests edged up as turnover-to-open interest ratio fell to just 1.2-1.3, a level suggesting the trading volume may be able to sustain at over $650mn a day. Trading in the week ahead remains hazy with the SCFIS dropping a further 4.4% on 27 November while the SCFI rebounded 10.2% last Friday on December GRI hopes

Rates to the US West Coast are slipping quickly as the window for holiday season shipments have closed even for the express e-commerce focused services, with the SCFI spot rates dropping by 4.1% last week. But rates to the East Coast are on firmer ground, with carriers pushing ahead with Panama Canal Surcharges that will kick in from December, with all of the FE-USEC services through the Panama Canal to compete for limited neo-panamax transit slots from January. SCFI spot rates to Europe have

Easing volumes especially to the US West Coast are starting hit spot freight rates with SCFI rates to USWC dropping by 8% last week. Zim’s surprise decision to relaunch the eCommerce Express (ZEX) service has sparked another round of rate cuts which has prompted CMA CGM to reconsider its plan to launch a similar express service in December. USEC rates are holding their ground as carriers continue to raise concerns over the Panama canal transit restrictions (in number of containership passage pe