Last week proved quiet from a pricing point of view but this week looks set to change as carriers are optimistic that head-haul routes may see box rate increases between 8% and 30% on February 1.
The container industry believes it could fall on the conservative side as the focus remains on maximizing cargo allocations before the Chinese New Year rather than sustainable price increases that could jeopardize a full cargo sailing.
The only changes that occurred within S&P Global Platts assessments were on the North Asia to North Continent and UK routes; both dropped $50 to $1,550/FEU last week. A logistics source said: “From our perspective we have two rate levels; our fixed rate levels are around $1,300/FEU and the spot rates are around $1,500/FEU.”
This lower level is not representative and there were carriers quoting $1,600/FEU last week. February 1 could see box rates increase to levels between $1,700-$1,900/FEU as demand remains strong due to the Chinese New Year.
The East Coast and West Coast North America inbound routes from North Asia were both unchanged last week and were assessed at $2,600/FEU and $1,300/FEU respectively.
The East Coast is tighter than the West Coast for cargo allocations, but both routes could see a box rate hike of between $200 and $500.
Industry players believe a realistic box rate to the East Coast could be $3,000/FEU on February 1. The West Coast box rate is more conservative at $1,500/FEU.
As February progresses we could see box rates slowly decline as Chinese New Year approaches if the carriers cannot fill their vessels.
Some carriers were discounting heavily for certain cargoes to fill their vessels.
Industry players have said we may see another price increase February 8 or a PSS if demand remains strong.
February could prove to be a volatile spot market as the carriers keep an eye on each other as well as continue annual contracts negotiations.
Please read our latest monthly report for more in depth insight into February on http://plts.co/grw730hZWsL
Source: Hellenic Shipping News.