CCFI Commentary Issue 47, 2016

  Rate Kept Stable and Index Rising

  In the week ending Dec.16, China export box market saw transport demand stopped to decline in general, and demand/supply condition stable. However, impacted by freight rates were pushed up in many routes, the composite index rose slightly. On Dec.16, Shanghai (Containerized) Freight Index (SCFI) issued by Shanghai Shipping Exchange quoted 824.39 points, up by 3.4% from one week ago.

  Beneficial from the active performance of local economy, transport demand in the Europe route remained stable. The average slot utilization rates in the Europe and Mediterranean routes kept above 90%, with some even full loaded. As market performed better than expected, some box liners reduced freight rate after rising, but some followed to hike it, so spot rate ups and downs. On Dec.16, freight rates in the route from Shanghai to Europe (covering seaborne surcharges) quoted USD1006 per TEU, falling by 3.8% from one week ago, while freight rate in the route from Shanghai to Mediterranean quoted USD947 per TEU, almost in line with that last week.

  Market performance showed that transport demand still on the relatively high level despite of the end of traditional peak season, both the average slot utilization rates in the routes from Shanghai to USWC and USEC remained above 95%, with some even 100%. For the good performance of demand supply condition, most box liners hiked freight train rate, which made spot rate arise remarkably. On Dec.16, freight rates in the routes from Shanghai to USWC and USEC (covering seaborne surcharges) quoted USD1608 per FEU AND USD 2627 per FEU, rising by 16.4%and 12.3% from one week ago respectively.

  In the Persian Gulf route, cargo volume was flat, and the average slot utilization kept about 90%. Since the insufficient demand, small part of box liners were forced to reduce freight train rate and spot rate fell further. On Dec.16, freight rate in the Shanghai-Persian Gulf route covering the seaborne surcharges quoted USD495 per TEU, falling by 6.1%against one week ago.

  In the Australia route, transport demand declined, and most of the average slot utilization between 70% and 90%. Although some box liners tried to push up freight rate, the whole freight rate tumbled. On Dec.16, freight rate in the Shanghai-Australia route covering seaborne surcharges had a week-on-week slip of 1.4% to USD 720 per TEU.

  Affected by the slow recovery of Brazilian economy, transport demand performed not well in the South America rote, where the demand supply condition failed to improve. Owing to the weak condition of market, freight rate competition stiffened, and box liners had to reduce it. On Dec.16, freight rate in the Shanghai-South America route (covering seaborne surcharges) quoted USD1816 per TEU, rising by 11.8% from one week ago.

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