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| CCFI Commentary Issue 06, 2013 |
| Weekly Report of China Export Container Transport Market (CCFI Commentary in Issue 06, 2013) Demand improves accompanied by indices correction China export box market kept stable in overall this week. Boosted by the pre-holiday shipments, demand rose marginally and steadily. Given a large amount of new deliveries this year, most lines took a cautious attitude towards the future market. The booking rates for most ocean-going trades witnessed a moderate decline this week. On Jan. 25, the China Containerized Freight Index (CCFI) issued by Shanghai Shipping Exchange (SSE), representation of the whole market, quoted at 1132.27 points, barely changed from last week, while the Shanghai Containerized Freight Index (SCFI), the mirror of the spot market, fell 1.4% from a week ago to 1227.84 points. On the Europe service, volumes continued to rise, a trend appeared since the beginning of January, but declined in a slower pace. The average slot utilization rate of this service remained around 90%. The increasing demand, brought by the exports rush ahead of the Lunar New Year, was regarded as the main driver for the year-to-date rate rise, one market participant told. However, he added, some lines gradually loosened the capacity supply depressed by the deliveries of newbuildings this year, which to some extend offset the positive effect of rising volumes. According to statistics from Alphaliner, over 100 thousand TEUs of new ships have hit the water in the first half of Jan alone. Lines started to cut rates to attract cargoes, causing most booking rates declining this week. On Jan. 25, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of Europe and Mediterranean fell to $1326/TEU and $1301/TEU, respectively down 1.7% and 0.8% from a week earlier. Alphaliner estimates that container deliveries will reach 1.75 million TEUs in 2013, surpassing the previous record of 1.57 million TEUs in 2008. Among the new-added ships, over 50 are ships over 10000TEUs. If all these mammoths are delivered, it will pose a great blow to the supply and demand balance on the Asia/Europe in the whole year. Since the supply and demand condition can give limited support to rates, the success of rate restoration that is planned to take effect in late Jan or early Feb, will largely depend on whether lines can carry out the plan collectively. Demand has been kept stable for some time on the North America service, where the average slot utilization rate sustained around 95%. In some cases, ships were even full-load. For the time being, the rate increase plan launched by lines at the beginning of this year proved to be successful. On Jan 25, the CCFI showed that the freight index of USWC service and USEC service representing the whole market, quoted at 1117.59 points and 1270.77 points respectively, slightly up 1.0% and 0.3% against last week. However, lines were still cautious on the market prospect, which explained the signs of fall of booking rates this week, On Jan.25, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of USWC and USEC quoted at $2497/FEU and $3657/FEU, slightly down 0.9% and 0.4% from last week. On the Persian Gulf and Red Sea service, volumes rose steadily this week when the exports rush ahead the lunar New Year is prevailing on this trade. Separately, volumes bounding to Persian Gulf went up slightly this week. However, the average slot utilization rate was just hit around 80% due to the overcapacity, and rates slide moderately this week. On Jan.25, the SCFI showed that the freight rate (covering seaborne surcharges) of service from Shanghai to base ports of Persian Gulf dropped 5.1% from last week to $731/TEU. Although there is no evident pick-up in volume on the Red Sea service, rates for some voyages jumped as the tighter supply condition when some lines shifted some capacity to carry boxes heading for East Med. On Jan. 25, the CCFI showed that the freight index of China/Red Sea service stood at 880.44 points, almost unchanged from last week. On the Japan service, volumes saw a slight drop this week, with the average slot utilization rate of ships from Shanghai to Japan ports staying above 70%. Rates fluctuated slightly during this week. On Jan 25, the CCFI showed that the freight index of this service quoted at 752.08 points, down 0.8% from a week earlier. |
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