15 May Middle East Volatility Impacts China’s Shipping Futures
The collapse of the Middle East peace talks has seen China’s container shipping futures rally, with interest up 15% from the previous week, potentially indicating shippers belief that rates will stay elevated.
In addition, Linerlytica’s latest report revealed that spot market rates have risen by almost $1,000/feu over the past month, with capacity utilisation at its highest level since January 2023.
They believe that further gains are probable, with freight future for end-June contracts currently trading at a 40% premium to the Shanghai Containerized Freight Index (SCFI).
With overcapacity concerns on the backburner, as diversions to the Cape of Good Hope have effectively removed more than 7% of the total fleet, this is alignment with Container xChange’s Container Price Sentiment Index, which suggests an expectation of stable, and gradual, price increases over the coming weeks.
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