As Peter Stallion of balticexchange.com writes, the ongoing volatility remains a major concern as ocean freight rates remain at historic highs as a result of capacity controls, equipment and volumes.
He further writes that the transpacific routes have levelled off on a plateau, at least in price, and remain supportive. Whereby the forward prices with the mean values of the last curve for January 21 have remained at a level of $3,450 on November 26, 2020.
Physical freight volumes remain constant
Physical volumes remain constant, while downward pressure from the Chinese government maintains an upper limit on higher prices. In the short term, there is no real premise that some of the underlying costs will continue to fall. The value of crude oil futures contracts is steadily increasing as consumption returns to the equation due to news of the lockdown and vaccines.
As the curve progresses, physical pricing could increase in line with higher long-term physical contract rates. This was largely priced in in November, with steady gains from Q2 21 to Cal 22.
Asian-European rates: Diverted equipment versus high demand
Asian-European rates, on the other hand, have seen the results of diverted equipment (and thus equipment shortages) versus high demand.
November spot rates rose 77.58% to $2,772/FEU on FBX 11 from $2,206/FEU on November 2.
Anecdotally, the spread between prices in Northern Europe and the UK was exponential, with spot contracts reaching up to $5,000/FEU during this period.
The surge in the spot price led to constant corrections and an overwhelming upward movement in the forward curve until the end of the year.
Enormous price increase
The enormous price increase, the obvious deterioration in service levels and the feeling that the market price for containers is currently overvalued compared to what could happen in 2021 has rekindled interest in trading container freight forward agreements.
Source: balticexchange.com
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