Analyzing The Shipping Market Outlook Forecast

The Houthi attacks in the Bab Al Mandeb strait and the subsequent rerouting around the Capes have supported all the different shipping markets to varying degrees. The highly unpredictable nature of the Houthis creates a lot of uncertainty, as a sudden cessation of attacks carries a lot of downside risk for shipping, while a long-term extension of the attacks carries significant upside risks. Here’s a summary of how this uncertainty could play out across tankers, bulkers, containers, and gas...

https://mfame.guru/analyzing-the-shipping-market-outlook-forecast/

Adoption Of Digital Solutions Lead To Increasing Transaction Volumes

International freight movements in the second quarter grew at unexpectedly high rates, surprising experts who had expected lower transaction volume tied to the ongoing Red Sea crisis, online shipping marketplace Freightos said.

Freightos Transaction Volume 

Freightos said in a statement that it had expected transaction volume to grow between 27% and 29% to a range of 303,000 and 309,000 transactions. It also said the Q2 growth rate of 32% outpaced its long-term targeted growth rate range of...

https://mfame.guru/adoption-of-digital-solutions-lead-to-increasing-transaction-volumes/

Unprecedented Demand And Challenges In Ocean Freight Shipping 2024

Global demand for ocean freight container shipping reached an all-time high in May 2024, driven by soaring spot rates and severe port congestion. This unprecedented demand, coupled with diversions around Africa due to the Red Sea conflict and congestion in Asia and Europe, has created significant pressure on ocean supply chains.

Record-Breaking Demand

In May 2024, the volume of container shipping hit a record 15.94 million TEU, surpassing the previous record of 15.72 million TEU set in May 2021....

https://mfame.guru/unprecedented-demand-and-challenges-in-ocean-freight-shipping-2024/

Market Dynamics Shift As Red Sea Crisis And Asian Port Congestion Drive Rate Increases

Recent saw significant tightening in market conditions in key deep-sea trades, with spot rates and surcharges rising steadily. The surge mimics the early pandemic growth phase, driven by vessel diversions around Africa, Asian port congestion and a spike in export demand from Asia. The question now is whether this trend will continue or if we will see a market reversal.

Drivers of Market Spikes
  • Vessel Diversion and Port Congestion: Major vessels being rerouted around Africa due to the Red Sea...

https://mfame.guru/market-dynamics-shift-as-red-sea-crisis-and-asian-port-congestion-drive-rate-increases/

July 2024 Market Summary: Freightos Baltic Global Index

The Freightos Baltic Global Index (FBX) saw a significant spike in June 2024, increasing by 30% month on month to $4,446 per FEU. This surge, surpassing the February peak by 30%, is driven by an early start to peak season and worsening congestion in the Red Sea, pushing rates to their highest levels since mid-2022. Overall, the global benchmark is now 238% higher than in 2019.

Transpacific Trade Dynamics
  • Early Demand Increases: Started in May, driven by tariff increases on Chinese goods in...

https://mfame.guru/july-2024-market-summary-freightos-baltic-global-index/

Red Sea Reroutings Propel Container Shipping Market in 2024

Market strength remains predicated on Red Sea reroutings, which significantly impact the global supply and demand balance in container shipping. The assumption of prolonged reroutings through the Cape of Good Hope for all of 2024 has shifted market expectations, with normal routings via the Red Sea and Suez Canal anticipated to resume in 2025, reports Bimco.

Supply/Demand Balance

The supply/demand dynamics in 2024 are shaped by several key factors:

  • Reroutings Impact: Prolonged reroutings through...

https://mfame.guru/red-sea-reroutings-propel-container-shipping-market-in-2024/

Rising Freight Costs Cast Shadows Of Uncertainty On East-West LNG Arbitrage

The arbitrage for LNG cargoes moving from the Atlantic basin to the Far East has opened up as market participants brace for the upcoming summer season, although rising freight rates pose a risk to the arbitrage opportunity.

Easing Asian Supply 

The spread between Europe and Asia’s spot LNG prices in June has remained wide, which means that more US cargoes should head to the Far East, where the netbacks from the US Gulf Coast are stronger, further easing Asian supply.

According to several industry...

https://mfame.guru/rising-freight-costs-cast-shadows-of-uncertainty-on-east-west-lng-arbitrage/

Container Prices Double Amid Tripling Leasing Rates In China

The average container prices in China have reached their highest in two years, at $3600 this week for 40 ft high cube cargo-worthy containers in China. These prices were somewhere around $1700 in March – April 2024. This is a 112% increase in two months.

Upward Trend 

While the average container prices (for purchasing containers) are on a significantly upward trend, the average one-way pick-up charges (for leasing containers) continue to develop at a staggering rate so far in June.

While prices...

https://mfame.guru/container-prices-double-as-leasing-rates-triples-in-china/

Should Crude Tanker Owners Start Trimming Spot Exposure?

Figure 1: TC rates vs spot earnings, Aframax tankers
  • While spot rates are expected to remain firm until 2026 amid tight supply, many charterers are now looking for period charters to avoid any further surge in rates, as reflected in the recent increase in time charter rates.
  • Vessel earnings are expected to remain high during 2024-25 because of tight supply, but any possible normalcy in the Suez Canal traffic will weaken freight rates.
  • The long-term period charter will ensure employability during any possible oversupply situation in the market in...

https://mfame.guru/should-crude-tanker-owners-start-trimming-spot-exposure/

Container Shipping Rates Soar Amidst Port Congestion

Inflation looks to be easing across the developed world, except for one glaring pocket of hot prices: cargo costs on the high seas.

Spot Rates Rise 

Spot rates for full-size shipping containers to the US and Europe from Asia rose again in the most recent data, with three key routes all topping $6,000 for a 40-foot equivalent unit, according to the Drewry World Container Index, released on Thursday. They’ve all tripled since the end of 2023, though the pace of increases is moderating.

Nearly six...

https://mfame.guru/container-shipping-rates-soar-amidst-port-congestion/

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