Recently, the futures prices of the Europe line have entered a period of oscillation after a high retreat, with the Europe line 2502 contract dropping over 15% from the November high of 3472. As of December 3, the price increased by 2.76%, quoted at 2799 points.
Shipping Monitoring Tool - Market Conditions
News Front
Regarding Israel and Lebanon, at around 4:00 AM Beijing time on November 27, it was reported from Israel Channel 12 and (Guotuo Daily) that the Israeli security cabinet confirmed that the ceasefire agreement between Israel and Lebanon would take effect at 10:00 AM local time on November 27. According to a statement on December 2, Lebanese Parliament Speaker Nabih Berri accused Israel of violating the agreement and stated that since the ceasefire agreement came into effect, Israel has violated the agreement more than 52 times. Subsequently, Israel and Lebanon again accused each other of violating the ceasefire agreement. This indicates that the early stage of geopolitical conflict in the Middle East may have eased, but recent conflicts have repeatedly disturbed the situation.
Yide Futures states that the significant increase in booking prices for the Europe line and repeated geopolitical risk factors, under the formal implementation of the December price increase plan by shipping companies, have led to a notable rise in spot market booking prices. Additionally, according to CCTV News, on December 1, local time, a U.S. warship was attacked by missiles and drones from the Houthi armed group in Yemen, which has weakened the market's expectations for short-term resumption of navigation in the Red Sea, leading to some market recovery. The main drivers of current market transactions still revolve around the supply and demand fundamentals.
We can continuously monitor the latest situation of the Middle East geopolitical conflict through the shipping monitoring tool - News function (experience now).
Shipping Monitoring Tool - News
Fundamentals
According to data from the Shanghai Shipping Exchange, on December 2, the SCFIS index was 2828.63, down 1.2%; on November 29, the SCFI index was 2233.83, up 73.75.
Shanghai Shipping Exchange - SCFIS Index
Shanghai Shipping Exchange - SCFI Index
Shenwan Hongyuan Futures Analysis states that based on the current pricing situation from shipping companies, the early to mid-December prices have already discounted from the initial price increase, with the average price for large containers decreasing from $6,000 to around $5,500. From the performance of various contracts on the market, the December contract reflects that the market's expectation for the current December price support is priced in but not pessimistic. Following Maersk's second adjustment of the large container price to $4,700 for week 50, and after Mediterranean, CMA CGM, and ONE's reductions, market doubts regarding year-end peak season demand have fermented. The 02 contract reflects that after the price reduction in mid to late November, the market does not have a positive outlook for demand at the end of the year. If year-end demand does not show an effective rebound, combined with the potential oversupply structure in 2025, the recent stage of rebound may have reached a turning point, and the possibility of wide fluctuations in the market is high.
Maersk Online Quote
We can also monitor the changes and historical trends of the spot freight rates of the Europe line through the shipping monitoring tool - Platts Major Route Container Freight Rate, Drewry Container Freight Rate, and FBX Container Freight Rate (click link to experience).
Shipping Monitoring Tool - Platts Major Route Container Freight Rate
Shipping Monitoring Tool - Drewry Container Freight Rate
Shipping Monitoring Tool - FBX Container Freight Rate
Additionally, through the shipping monitoring tool - Capital Bomb (click link to experience), we found that the Europe line 02 contract triggered three major capital bombs with higher main buying ratios during yesterday's afternoon session. After triggering, the price fluctuated upwards, reaching a short-term high of 2848, and subsequently, the price slightly retreated into oscillation.
Shipping Monitoring Tool - Capital Bomb
Institutional Perspectives
Guotou Futures: In terms of the spot index, the new SCFIS index reported 2828.63 yesterday, showing a slight decline of 1.15%, reflecting the downward trend of the price center in late November. The new TCI Tianjin-European port index rose significantly by 9.73% compared to the previous period, reflecting the fulfillment of the price increase announced at the beginning of the month at the North China ports, with large container quotes at $5,311/FEU, an increase of $945.56/FEU from a week ago. This week, bookings for week 51 will gradually begin, considering the supply side's contraction in capacity and reduced cargo pressure, while demand is still expected to exhibit peak season characteristics. Coupled with ongoing negotiations for long-term contracts in 2025, shipping companies still have price support power, and some shipping companies may take advantage of high suspension to adjust their quotes. It is advisable to maintain a low long strategy.
Everbright Futures: Recently, the geopolitical situation has eased. According to reports, Israel and Lebanon are about to reach a ceasefire agreement, and Hamas has also expressed readiness to reach a ceasefire agreement with Israel in the Gaza region. The market's shift in expectations regarding the geopolitical situation has led to significant fluctuations in prices. The current price center for large containers in December is around $5,500/FEU, with expectations for a better outcome than in November. On one hand, the arrival of the peak demand season is expected to drive an increase in loading rates; on the other hand, recent adjustments to the export tax rebate policy may lead to a surge in shipping volumes. Therefore, for EC2412, optimistic demand and price increase expectations support the near-month contracts relatively stronger, while EC2502, although being the main contract and within the peak season range, still has a certain amount of time until now and is greatly affected by geopolitical news. Investors are advised to pay attention to risk control, operate cautiously, and monitor the price increase announcements and peak season demand realization in December.
Zhongcai Futures: In the short term, based on the current port booking and container quantitative estimates, the shipment demand for the Europe line and the East America line remains high, with tight capacity and strong diversion effects. After Trump took office, public security has improved, and consumer willingness during the year-end holiday may rise. The on-time rate for shipment and delivery of goods (weekly) and the on-time service rate for departure and arrival (weekly) have slightly rebounded, with a predominance of return ships in the shipping routes, thus the tight domestic port capacity may gradually ease in the next two weeks. In the long term, the world has entered a collective interest rate cut cycle, with the year-end consumption in Europe and America expected to show peak season characteristics, and forward data not weaker than last year, with limited downside for oil and fuel oil. In summary, the tight capacity has eased, recent export trade peak season orders are still in effect, and trade frictions may lead to a reduction in near-month booking while increasing far-month orders. The overall outlook for the Europe line in the short term is weak, with near-month focusing on basis and far-month being bearish.
Article forwarded from: Jinshi Data