The Shanghai Shipping Exchange powered Shanghai Containerized Freight Exchange (SCFI) logging its biggest weekly gain in percentage terms (about 7.95%) since May-2021 to pass the four-digit mark ending at US$1,033.
The index has now logged a gain of 14% in just one month, from the recent low of US$906.
Its outperforming counterpart until the recent past, the China Containerized Freight Index (CCFI) dipped further to end at US$942, encircling the January-2020 levels- led primarily by falls in the trade routes to Japan, South Africa and the Mediterranean, this week. With the empty container Index still reeling at 0.64 for Shanghai and Qingdao, there has to be further due diligence on the export import (EXIM) split.
The Drewry’s World Container Index (WCI) seemed consolidated for the second straight week ending flat, with a marginal tinge of red. The index was buoyed by the rates from China to Europe and China- US East Coast with the China-US West Coast trade route extending its fall even as rates on other routes remained flattish.
In the meanwhile, the global container volumes have fallen by 5% in February 2023, with the number of container ships hitting the US coast halving over the year. Another key indicator of this is the port congestion reported to be below five days for most major US ports. With inventory utilisation and levels higher still, it would take some time for the inventory glut to reduce, even as inventory and warehousing costs mount as well, to see a proper flow of demand. So while it may not be the start of a fall reversal, the rates seem to have factored the changes heavily, buoyed by supports.