- The FBX container futures market witnessed significant fluctuations in January 2024, driven by geopolitical tensions, volatile indices, and shifts in the forward curve.
- Against the backdrop of heightened political unrest in the Middle East and the Red Sea, the FBX11 and FBX13 routes experienced notable impacts.
The Geopolitical Landscape: FBX11 and FBX13 Surge
The month began with FBX11 surging from 1590 at the end of 2023 to a remarkable 5340 on January 29, while FBX13 followed a similar trajectory, reaching 6345. These extraordinary jumps were attributed to vessels avoiding the Red Sea, responding to geopolitical events in the region.
Backhaul Routes and Mixed Trends
While FBX02 remained rangebound in January, fluctuating between 339 and 494, FBX12 (North Europe to China/East Asia) witnessed substantial increases. Traditionally navigating through the Red Sea, FBX12 surged from 312 at the end of December to 1256 on January 29, reflecting the impact of vessels altering routes.
Seller Emergence and Market Response
Sellers have emerged on all routes, particularly on FBX11 and FBX13, offering larger volumes. Strips for Cal25 and Cal26, as well as the H2 ’24 strip, have entered the market. FBX11 Cal25 was offered at $4500, and FBX13 Cal26 at $5250 in significant sizes. Interest has been observed in FBX01, with bids and offers reflecting the evolving market dynamics.
Risk Premium and Future Outlook
Sellers are seeking a significant risk premium on all routes, considering the ongoing geopolitical volatility. With the broader environment showing signs of instability, both flat and futures prices are expected to incorporate substantial risk and time premiums in the coming weeks.
In summary, January 2024 underscored the challenges of navigating a container futures market influenced by geopolitical uncertainties. The dramatic shifts in indices call for strategic decision-making and robust risk management as stakeholders adjust to the evolving global reality.
Did you subscribe to our daily Newsletter?
It’s Free! Click here to Subscribe
Source: Baltic Exchange
