World News
Analyst: Asia - North Europe Box Rate Rise Will Be a Short-Lived
A spike in container spot freight rates last week between Asia and North Europe will be a "short-lived increase" as indexes are expected to decline again this week, the LoadStar reports.
On Friday the Shanghai Containerized Freight Index (SCFI) was reported to have increased by $319 per TEU on the Shanghai-Mediterranean route to $1,003, and by $518 on the Shanghai-North Europe route to $861 per TEU.
However Richard Ward, Container Derivatives Broker at Freight Investor Services (FIS) told the LoadStar on Friday: "As usual, I think it will be a short-lived increase."
Ward added that the declines could start as early as this week.
The report noted that both routes fundamentally have excess capacity, a situation likely to be exacerbated as more ultra-large container vessel (ULCV) tonnage hits the water in the coming months.
Weak cargo volumes along with poor utilisation levels in April were said to have resulted in the cancellation of a number of sailings between Asia and North Europe, as well as the enforced three-week idling of Mediterranean Shipping Company (MSC)'s recently delivered 19,224 TEU capacity mega-box ship MSC Oliver in China before its maiden voyage to Europe.
Despite the gloomy outlook, last month analyst agency Alphaliner said that even though freight rates have plummeted to historic lows, the drop in bunker prices will save box shippers about $14 billion this year.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 553.50 | 2.50 | 673.00 | 1.00 |
| Rotterdam | 514.50 | 1.00 | 651.00 | 1.50 |
| Houston | 545.00 | 4.50 | 671.00 | 1.00 |
| Fujairah | 543.00 | 0.50 | 747.00 | 0.00 |
| Global 20 Ports Average | 574.00 | 0.50 | 748.00 | 8.00 |
| Global 4 Ports Average | 539.00 | 1.50 | 685.50 | 0.00 |
| Global Average Bunker Price | 626.50 | 2.00 | 800.50 | 0.50 |
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