Markets/Trades

China PMI Export Order in June slipped to 46.4, denting hopes of a restocking led rebound in export cargo volumes with deeper declines expected. US retail data remains weak especially for home improvement retailers with inventory levels remaining elevated (Home Depot and Lowe’s). The main US grocery/department stores still struggle with high inventory levels, especially for Walmart whose inventory to sales ratio remain above its historical levels. Nike’s sales grew 5% YoY for the 3-month ended

Transpacific rates continued their decline over the past week, with carriers forced to undercut rates on both the West Coast and East Coast as capacity utilization levels are still dropping. There will be some capacity reductions over the coming weeks, with carriers expected to obtain a $200-300/feu rate increase in early July but the sustainability of the rate increase remains in doubt after the failure of the last 4 transpacific GRI attempts. Asia-Europe rates continued to slip despite relat

Transpacific rates have fallen to fresh lows with rates dropping to $1,100 to $1,150/feu to the West Coast which is below the SCFI assessment of $1,207/feu. Rates to the US East Coast rates took a larger tumble with rates set to drop below $2,000/feu compared to the current SCFI rate of $2,103. The resolution of the ILWU negotiations will put further pressure on transpacific freight rates as the threat of a peak season disruption to cargo flows into the US has been removed and with no pick up c

Customs of PRC reported foreign trade figures on 7 Jun, for which the market was negatively surprised by the 7.5% YoY drop in May whereas analysts were expecting just 0.4% decline. But what the market have missed may be more concerning for container shipping, in our view, which is the sequential drop in export since March. Since 2014, Chinese export has always grown sequentially and on average 14% from March through May, an usual seasonal pattern. This year, the Chinese exports fell 10% in t

China's April PMI New Export Order came out as 47.6 on 30 April, suggesting Chinese export order experienced sequential contraction in April comparing to that of March. Reading through to the volume, the China PMI export orders suggests container volume may experience sequential softening in May or even June relative to the previous months. Though, it is important to read this data bearing in mind that China could be losing export market share to the ASEAN exporters (read here [https://www.liner

UPS share price dropped by 10% overnight (Apr 26) on bearish management guidance particularly on the domestic package, which offers a read-through to the demand for container shipping. On what may indicate the latest development of US retail sales, UPS's domestic package volume dropped 5% YoY in 1Q 2023, an acceleration from the 4% YoY drop in the previous quarter. Moreover, management in an CNBC interview suggested that the decline in the domestic package volume accelerated markedly during Ma

China's March PMI New Export Order came out as 50.4 in the morning session of 31 March, suggesting Chinese export order may have seen marginal sequential growth in March comparing to February. But March's 50.4 comparing to February's 52.4 means growth decelerated over the past month. Softness of exports from China could be a combination of the market share losses and overall soft demand in the western hemisphere. In terms of container shipment volume, China has been losing market share to the

Additional data for 30 departures returned today by our algo and there was little change, i.e the utilization level for vessels departed this week so far has been very high. Spot freight rates as represented by Shanghai Container Shipping Index (SCFI) has the first up move in a year.  SCFI is usually trend sensitive in the way that if it moves up in one week, the chance of it moving up in the next week is over 50%. SCFI has published 720 editions since its inception in March 2009. Of these 720

Capacity utilization of all Inter-Regional trades and the 4 main east-west trades for vessels that have departed during the first 4 days of this week ( i.e. between 26 Mar and 29 Mar) moved up to level have not been seen since August last year. Although there has been week to week volatility, this set of data has been trending up since reaching a recent cycle low in week 5 of 2023. This 2-month up trend has to be looked at in connection with the sequential increase in capacity deployed into th

The cyclical or short term trend is the down turn in the container shipping volume , which has seen global port throughput falling for 5 consecutive months since September 2022, driven by the destocking cycle in the US, soft housing market in the US impacting particularly the housing related shipments, inflation that reduces western consumers' disposable income, rising share of services relative to goods in consumption. The secular trend or the long term trend maybe the fall in China's contrib