Shipping container prices from East Asia and China to the US West Coast fell this week, based on a report from ICIS. This may cause some carriers that were planning general rate increases (GRIs) on December 1 to reconsider.
Read also: Container prices steady as Asia and Europe rise and the Pacific weakens
Fares from Freightos were down 6% from the previous week but up 6% to the East Coast.
Rates are once again facing downward pressure after capacity management and October GRIs halted the decline for a while, said Judah Levin, head of research at Freightos.
“Since October, container carriers have been facing downward pressure on rates due to seasonal declines in demand and increased capacity for key east-west trade,” Levin said. “However, driven by significant steps to cut production capacity, they successfully pushed ahead with the implementation of GRIs in mid-October that rescued interest rates from two-year lows and pushed prices back up with the November 1 rate increase.”
While weekly rates showed single-digit declines, daily rates “so far this week have fallen more than 20% to about $2,100 per 40-foot-equivalent unit, erasing November’s gains and, for now, are back around the level of the GRI bump of mid-October,” Levin said.
While Freightos showed a weekly increase in Asia-USEC rates, this trade route is also under less pressure.
“Daily prices on the East Coast have also fallen more than 20% so far this week to about $3,000 per unit, to pre-October GRI levels,” Levin said. “Some carriers had planned to issue GRIs for December, but may reconsider in light of the sharp decline this week.”
Spot rates in the New York Freight Exchange (NYFI) shipping index are showing some sharp differences in sub-trades from Asia to the United States, said Lars Jensen, head of consultancy Vespucci Maritime.
From Asia-USWC, prices are up $609/FEU from China, $367/FEU from Southeast Asia, and $389/FEU from Northeast Asia.
“But for 20-foot containers (TEU), the bag was more mixed with China up $57 per TEU, Southeast Asia down $25 per TEU, and Northeast Asia up $744 per TEU in just one week,” Jensen said.
USEC prices from Asia have developed very differently, Jensen said. 40-foot containers saw prices rise $160/FEU from China, Southeast Asia prices increased $50/FEU, and Northeast Asia prices increased $226/FEU. Twenty-foot container prices rose by US$160 per TEU from China. From Southeast Asia, prices rose by US$58 per TEU, but Northeast Asia prices fell by US$175 per TEU.
“Not only does this show that there is a somewhat unstable market in the Pacific region, but also how conditions related to sub-deals can vary significantly,” Jensen said.
Container ships and shipping container costs are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transporting polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers. They also transport liquid chemicals in isotonic tanks.
Source: Index Box Market Intelligence
