Rates for shipping containers from Asia to the US fell significantly this week on increased capacity, while spot rates for liquid chemical tankers were stable to softer.
CONTAINER RATES
Global average container rates continue to fall, dropping by 10% this week, according to supply chain advisors Drewry and as shown in the following chart.
Average global rates have fallen by almost 30% from 9 January, according to Drewry data, after rising from late October amid frontloading volumes ahead of a possible union labor strike at US Gulf and East Coast ports.
Rates from Shanghai to New York plunged by 13% from the previous week, while rates form Shanghai to Los Angeles plummeted by 11% week on week, according to Drewry data and as shown in the following chart.
Rates to Los Angeles are down by 29% from early-January, and rates to New York are down by 27.6% over that time.
Drewry expects a slight decrease in spot rates next week as capacity increases.
Deliveries of new container ships and a slowdown in recycling older vessels have led to an increase of 2.4 million TEUs (20-foot equivalent units) since the beginning of 2024.
Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said during a webinar that market players are watching two future dates – 4 March, when the reassessment of the Mexico and Canada 25% tariffs takes place, and the 1 April deadline when investigations should be complete on President Donald Trump’s reciprocal tariffs.
Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets.
They also transport liquid chemicals in isotanks.
LIQUID TANKER RATES STEADY-TO-SOFTER
Rates for liquid chemical tankers ex-US Gulf were stable to softer this week, with slight decreases seen on the US Gulf-Asia trade lane for small parcels and on the US Gulf to Brazil route.
Rates for larger parcels on the US Gulf-Asia trade lane were unchanged amid a slowdown in activity.
Shipping brokers are seeing inquiries along this route for ethanol, monoethylene glycols (MEG) and ethylene dichloride (EDC) for March shipping dates.
Falling rates on the US Gulf-Brazil trade lane are because there is plenty of open space for the rest of February and into March, brokers said, and limited spot activity.
A broker said it is seeing an increase in inquiries for this trade lane which could help steady the market.
On the transatlantic eastbound route, a broker said there are plenty of inquiries and that most of the regular contract shipowners have been able to secure smaller parcels to help fill out their vessels.
Shipments of styrene monomer (SM) were fixed to Europe, as well as methanol and caustic soda.
Source: By Adam Yanelli, ICIS
