Container Market Forecaster July 2024 by Container xChange

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The July 2024 Container Market Forecaster by Container xChange highlights significant fluctuations in container prices, driven by geopolitical tensions and supply chain disruptions. The first half of 2024 saw a sharp rise in container prices, especially in Asia and the Middle East due to the Houthi attacks, with China experiencing a 78% increase. Hong Kong and Vietnam saw the largest month-on-month spikes in June. Looking ahead, the market is expected to cool in the second half of the year, though ongoing conflicts and potential labor strikes may prolong challenges. Despite these uncertainties, increased container fleet capacity may help stabilize prices and foster trading activities, reports Ajot.

H1 2024 Container Rates Recap

  • Global Trends: Shipping costs surged in H1 2024, defying the traditional off-season lull.
  • Regional Impacts:
    • Asia and Middle East: Significant uptick in container prices due to Houthi attacks.
    • Stable to Rising Prices: Prices in traditional import destinations remained stable or decreased but started moving upwards.

Main Destinations with Significant Container Price Upticks

  • May to June 2024:
    • Hong Kong and Vietnam: 35% spike.
    • China: 27% spike.
    • Russia: 24% spike.
    • Taiwan and Malaysia: 23% spike each.
    • India: 21% spike.
    • Singapore: 7% spike since May, 31% since October 2023.
  • October 2023 to June 2024:
    • China: 78% increase.
    • Hong Kong: 77% increase.
    • Spain: 42% increase.
    • Uzbekistan: 40% increase.
    • Thailand: 35% increase.
    • Malaysia and Netherlands: 29% increase each.
    • Taiwan: 28% increase.
    • Vietnam: 27% increase.

Regional Analysis of Houthi Attacks’ Impact

  • Northeast Asia: Biggest price increase of 69% since October 2023.
  • Broad Increases: Across Central Asia, the Middle East, the Indian Subcontinent (ISC) region, Japan, Korea, and both Northeast and Southeast Asia.

Market Drivers and Developments for H2 2024

  • Geopolitical Tensions: Ongoing conflicts and potential labor strikes could prolong supply chain disruptions.
  • Container Price Sentiment Index (xCPSI): All-time high, indicating expectations for rising prices in H2 2024.
  • North American Market: Container demand spikes and prices begin to rise, driven by pre-election market uncertainty and supply chain disruptions.

Expert Insights

  • Tony Yu, Baiscon Shipping Line: Predicts continued rise in North American container prices due to inventory clearance and high procurement costs.
  • Daniel Nee, Holyidea Logistics Equipment Manufacture: Emphasizes the influence of geopolitical risks and advises patience and resilience in the market approach.

Market Outlook for H2 2024

  • Geopolitical Disruptions: Expected to continue, causing market uncertainties.
  • Potential Labor Unrest: Significant disruption risk, especially in US East and Gulf ports.
  • Container Rates: Expected to ease if market conditions stabilize, potentially increasing trading and leasing activities.
  • Fleet Growth: 10.6% growth in the global container fleet from June 2023 to June 2024 may help stabilize prices and increase trading activity.

Overall, the container market in the second half of 2024 remains unpredictable, heavily influenced by geopolitical tensions, supply chain disruptions, and potential labor unrest. However, a stabilization in rates and increased fleet capacity may offer some relief and opportunities for growth in the sector.

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Source: Ajot