Uncertainty over freight rates has disrupted trading in container shipping futures based on trades at the Shanghai Shipping Freight Exchange (SSEFC), which has suffered its worst declines since trading began last June.
Average daily volumes traded in the first week of February fell to 15,000 TEUs compared to the 169,000 TEUs average recorded for January, reported Alphaliner. Forward freight rates hit their five per cent daily cap on four consecutive trading days during the period as the market struggled to find equilibrium.
The market was mauled by sudden rate increase announcements by shipping lines, ranging from $ 400-900 per TEU on the Asia-Europe trade and $ 800 per FEU on the transpacific trade.
Alphaliner said that at the start of February, only 74 TEUs were traded on all Shanghai to Europe future freight contracts as market players refrained from selling forward rates due to market uncertainty.
Trading volumes are forecast to remain highly volatile over the next few weeks as forward rates are expected to witness wild swings as the market slowly digests carriers' rate increase announcements. Forward rates to North Europe have undergone a steep increase, with April contracts currently trading at $ 1,078 per TEU, an increase of 54 per cent over the low $ 700 per TEU in January. |
