Container Futures Trading Indicates Prolonged Red Sea Crisis

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Trading of China’s Asia-North Europe container shipping futures saw double-digit gains for early 2025 freight levels, indicating that shippers believe the Houthis will continue to terrorize shipping in the Red Sea into next year, reports The Loadstar.

Red sea crisis

Yesterday, from a week ago, the EC2502 (February 2025) and EC2504 (April 2025) contracts gained 17%, to $3,711 per teu, and 27%, to $3,097/teu, respectively.

Around 8,000 to 15,000 contracts are bought and sold daily.

The new EC2506 (June 2025) contract gained 32% since it was released for trading on 25 June, closing at $3,173/teu.

Containerised Freight Index Futures began trading last August through the Shanghai International Energy Exchange, a subsidiary of the Shanghai Futures Exchange. The paper trades are executed by shippers, forwarders, and liner operators.

Closing prices of contracts yesterday were, however, significantly lower than the spot rate ($4,880/teu), indicating that there could be some correction once the traditional third-quarter peak season is over. On average, spot rates gained 7% week on week last Friday.

However, the EC2408 (August 2024) contract closed at $5,322/teu, 1% less than the Shanghai Containerised Freight Index’s settled rates, due to concerns that the rate rally will be challenged by the new capacity being introduced on the Asia-North Europe route this month – even though the increasing consensus among forwarders on the trade is that rates are likely to remain elevated for at least the next month.

Nonetheless, average capacity utilization out of Shanghai weakened slightly last week, with two 2M Alliance services reported at less than 90% full.

In a report on Friday, Clarkson’s analyst Trevor Crowe said tonne-mile growth had reached a 14-year high because of the Red Sea crisis.

Clarksons projects 2024 global seaborne trade growth at 2.3% in terms of tonnes, but 5.1% in tonne-miles, which would see the additional tonne-miles of seaborne trade exceed last year’s total, with 3,187bn tonne-miles added, compared with 2,517bn last year.

Crowe wrote that ships re-routing around the Cape of Good Hope were lifting tonne miles across various shipping segments, with containers seeing the largest growth, of 12% in the miles, resulting from 690 box ships detouring around Africa.

He claimed this could be the second-largest year of additional tonne miles on record, after 2010 when Chinese stimulus measures drove rapid growth in raw materials trade, bringing tonne-mile growth to 3,505bn that year.

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Source: The Loadstar