Rates for shipping containers from east Asia and China to the US were mixed this week as capacity on the trade lane is expected to tighten slightly and import demand is expected to ease.
Rates to the West Coast are between $7,515-8,365/FEU (40-foot equivalent unit) while rates to the East Coast are between $9,600-11,500/FEU, remaining near the highest since mid-2022 for both routes.
Rates from supply chain advisors Drewry were lower, falling by 6% from Shanghai to Los Angeles and by 5% from Shanghai to New York.
Drewry said six blank sailings have been announced for next week, up from five this week, indicating tight capacity. Meanwhile, strong US import demand is easing, which could put further downward pressure on freight rates.
Hence, Drewry expects rates to decrease next week.
Rates from global logistics company Freight Right fell by 1% to the West Coast and rose by 0.22% to the East Coast.
Robert Khachatryan, founder and CEO of Freight Right, said that space is improving, with softer volumes and more consistent vessel schedules giving importers greater booking flexibility.
“As the traditional pre-holiday ocean shipping peak fully closes out, pricing has settled into a steady holding pattern across both coasts,” Khachatryan said.
Looking forward, Khachatryan expects China-US ocean rates to remain broadly stable through the first half of November, with the possibility of modest declines.
Weekly rates from online shipping marketplace and platform provider Freightos rose by 3% to the West Coast and by 9% to the East Coast.
Judah Levine, head of research at Freightos, said this week’s increases were a surprise as he expected transpacific prices would cool post-Golden Week.
“Daily prices to the East Coast have receded so far this week but are still up about $200/FEU compared to last week,” Levine said. “Some forwarders, however, report signs of cooling demand and space becoming more available and still expect a seasonal easing in rates.”
Rates on the Shanghai Containerized Freight Index (SCFI), which tracks rates for containers leaving Shanghai, edged higher by 0.16%, rising for the fourth week in a row.
Rates on the NYSHEX Freight Index (NYFI) rose by 1.9% to both coasts.
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), which are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers.
They also transport liquid chemicals in isotanks.
LIQUID TANKER RATES MOSTLY HIGHER
US chemical tanker freight rates assessed by ICIS were mostly higher this week along most major trade lanes, with increases for parcels from the US Gulf (USG) to Europe, Brazil, and India, with smaller changes along the Asia trade lane.
For the USG to Rotterdam, there are limited bits of cargo space still available for November for small parcels. A lack of interest has prompted clean petroleum products (CPP) tonnage to focus on higher rates in the clean market, leaving limited availability for chemicals. It has been difficult for owners to accommodate larger parcels which has prompted rates to increase for those size cargoes.
However, there seems to be more interest in caustic soda from USG to ARA, with at least one cargo of 10,000 tonnes for various November dates, as well as two 15,000-tonne cargoes of styrene, along with a large parcel of MEG (monoethylene glycol) all being fixed.
Rates from the USG to Asia remained steady both for smaller parcels and for larger parcels. Overall, this trade lane remains dependent upon contract of affreightment (COA) volumes. Most players remain hesitant to take the opportunity due to the risk and uncertainty. Most cargoes discussed in the market were methanol, MEG, and ethylene dichloride (EDC) to southeast Asia.
From the USG to Brazil, the market has been a bit more active this week particularly for smaller parcels. Overall, spot chemical trade on this route is relatively steady, however a tighter positions list supports the freight rates.
Despite the uptick in inquiries there is not enough significant activity that would suggest any increase in demand. Most of the regular owners have space remaining and are trying to fill space while supporting current freight levels.
COA volumes remain steady as there were some inquiries for caustic soda, MEG, and styrene moving to Brazil.
Freight rates are now expected to remain pressured higher for the time being.
Along the USG to India route, demand to WC India for MEG, methanol, and ethanol continue to prevail as several large parcels are looking for any available space. For the time being rates are slightly higher week on week.
