Rates for shipping containers from east Asia and China to the US edged higher, liquid chemical tanker rates ex-US Gulf were stable to softer, and the Panama Canal will limit the number of daily transits in September, highlighting shipping news this week.

CONTAINER RATES
Container rates from Asia to the US continued to rise this week, and rates to the West Coast are up by more than four times since the start of the US-Iran war. Rates to the East Coast are up by three times over the same period.

Rates to the West Coast are now between $6,000/FEU (40-foot equivalent unit) and $7,400/FEU, while rates to the East Coast are between $8,000/FEU and $10,500/FEU.

Rates from supply chain advisors Drewry were up by 9% week on week from Shanghai to Los Angeles and by 9% from Shanghai to New York, as shown in the following chart.

Drewry said demand has remained resilient on the transpacific trade lane, with carriers continuing to manage supply through blank sailings and capacity reductions.

Drewry said capacity in August declined 9% from July on Asia-USEC and fell 0.4% MoM on Asia to USWC, further tightening space availability. Drewry expects freight rates to remain stable next week due to tightened capacity.

Additionally, several carriers have announced Panama Canal surcharges on Asia–USEC and Asia–Gulf Coast trade routes effective September, which could add further pressure on rates.

Rates from online shipping marketplace and platform provider Freightos rose by 9% to the West Coast and by 3% to the East Coast.

Judah Levine, head of research at Freightos, also pointed to persistent peak season demand for rising rates, but noted higher bunker fuel prices and Panama Canal surcharges as other contributors.

Peter Sand, chief analyst at ocean and freight rates and analytics firm Xeneta, said the spread between the two fronthaul trades is intriguing because there is significant money at stake for shippers depending on which seaboard they choose to import into.

“Importing into the US East Coast is currently $3,334/FEU more expensive than the US West Coast,” Sand said, adding that the current spread between the trades is greater than the total cost of shipping one container into either coast before the start of the Middle East crisis on 28 February when spot rates stood at $1,879/FEU into US West Coast and $2,651/FEU into US East Coast.

“If a shipper has the flexibility of importing goods into US West Coast instead of US East Coast, then they must seriously consider it because there is dramatic savings potential, even if it means a heavier reliance on truck and rail to reach the final destination,” Sand said. “This underlines the dynamic approach supply chain professionals must take in managing resilience and freight spend during major market shocks.”

Rates on the Shanghai Containerized Freight Index (SCFI), which tracks rates for containers leaving Shanghai, rose by 1.6%, the fourth weekly gain in a row following three consecutive down weeks.

Rates on the NYSHEX Freight Index (NYFI) rose by 2.0% to the West Coast and fell by 1.5% to the East Coast.

Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), which are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers.

They also transport liquid chemicals in isotanks.

TANKER RATES
US chemical tanker freight rates assessed by ICIS were steady to softer this week with rates on the transatlantic route edging lower on the high side while most trade lanes are facing downward pressure as issues with the Rhine River persist.

Although most of the regular carriers have noted that there is little prompt space, they did say that plenty of space remains for September.

Should this trend continue, rates could be pressured even lower. Large parcels of methanol and caustic soda as well as parcels of styrene were seen quoted in the market.

Contract of affreightment (COA) volumes remain steady heading into the first half of September.

Rates along the USG-Asia trade lane have firmed a bit as prompt space has become limited, particularly for the balance of the month and into early September.

Regardless, charterers are still in a wait-and-see mode, as besides COA cargo there is very little seen in the market.

Also, there are very few new spot enquiries, therefore the shorter tonnage list supports the rates.

The usual spot cargoes of methanol from Jose are the only ones reported, leaving methanol requirements from the region active to Asia.

From the USG to Brazil, this trade lane remains unusually quiet and in turn rates seem to have steadied.

Fewer fixtures were noted this week, and the lack of prompt availability seems to indicate supply is somewhat tight and therefore owners appear to be cautious about letting rates decline any further.

Much like the other trade lanes, demand seems to be mostly covered by COAs, caustic soda, ethanol and monoethylene glycol (MEG) continue to be seen quoted in the market.

The USG to India route has not seen an uptick in enquiries over the last week with no confirmed fixtures, leading to lower rates along this trade lane.

There was only one new enquiry regarding September dates.

Along with the other regions, freight rates are widely viewed as softer, although large parcels of ethanol, methanol, and MEG have been seen quoted in the market for August and September dates.

Source: icis.com

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