An unusual drop in prices was observed in Chinese container exports, according to chief shipping analyst at BIMCO, Niels Rasmussen, who noted that box rates, which normally enjoy a spike in the weeks leading up to Chinese New Year (CNY), seem to be on a free fall this year.
In fact, spot rates for containers loading in Shanghai will normally be 12% higher just before CNY than 10 weeks earlier. Similarly, average rates for all containers loading in China will normally end at 4% higher.
However, this year, both spot and average rates continue to fall, according to BIMCO’s report.
The China Containerized Freight Index (CCFI), which measures average Chinese export container rates, has seen a 50% drop since February 2022 and stood at 1,730 seven weeks ago. Moreover, last week the index hit 1,271 and has therefore dropped by a further 27% since mid-November.
“From 2011 to 2020, the CCFI on average increased by 3% in the seven weeks from week 10 before CNY to week three before CNY. The worst year was 2012 when the CCFI fell 6% during those seven weeks while the best year was 2020 with an 8% increase. The market situation in 2021 and 2022 was unique as congestion and a spike in consumer demand led the market, and the lead-up to CNY was also strong. So far, the development in 2023 is therefore the worst in 13 years,” commented Rasmussen.
For exports to Europe and Mediterranean, the index has fallen by 34% and 57% respectively during the last seven weeks, while for exports to the US West Coast and East Coast CCFI is down by 26% and 27% respectively.
“During the last seven weeks, the China Containerized Freight Index (CCFI), which records average container freight rates for exports out of China, has, in contrast to earlier in 2022, also dropped faster than spot rates for exports out of Shanghai (as recorded by the Shanghai Containerized Freight Index – SCFI). The SCFI has fallen 23% whereas the CCFI has fallen 27%,” pointed out Rasmussen.
