Carriers have pushed ahead with the 1 November rate hikes with smaller increases than initially planned but they have at least reversed the continuous declines since July that has seen the SCFI and CCFI shed 45% and 37% of their values. Carriers will struggle to retain the rate hikes with cargo demand still weak in the seasonally weak November period in the absence of more capacity cuts. Although capacity utilisation has increased in the last 2 weeks of October, this was due to post Golden Week blanked sailings out of China and front loading ahead of the November rate hikes.
Capacity continues to be affected by port congestion with adverse weather conditions causing delays at Central China ports at the end of last week. If utilisation fails to rebound, carriers are expected to slash freight rates again once the cargo backlog is cleared. Containership charter rates have continued to firm with idle capacity remaining at less than 100,000 teu as carriers continue to snap away at all available tonnage.
Linerlytica
TS Lines lacklustre IPO
TS Lines received a lukewarm response to its Hong Kong stock listing, with its shares trading below its issue price of HK$4.18 on its first trading day to close at HK$4.10 on 1 November 2024 before rebounding by 5.12% to HK$4.31 on 4 Nov.
TSL shares currently trade at a 43% discount to its adjusted book value, compared to the average discount of 15% for its main publicly listed peers (excluding SITC that currently trades a 367% premium to book value).
The addition of TS Lines brings the number of publicly listed liner shipping companies to 11 out of the Top 22 carriers, excluding OOIL which is majority owned by COSCO.
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