Suddenly! A 40% plunge! A collective plunge...

On August 8, the main contract of the container shipping index (European line) futures listed on the Shanghai International Energy Exchange reported 2754.9 points, a drop of more than 15%. In the past month, the main contract of the container shipping index (European line) futures has fallen from the previous high of 4763.6 points to the current 2800 points, a drop of more than 40%. Under its drag, shipping stocks also fell collectively. Data from the Shanghai Shipping Exchange showed that on August 2, the Shanghai Export Container Comprehensive Freight Index fell for four consecutive weeks, falling more than 400 points from its recent high, a drop of more than 10%.

Overseas cargo transportation demand has declined recently. In the case of unstable demand, market sentiment may be dominated. Analysts believe that the rise in spot freight rates has slowed down, coupled with the disturbance of geopolitical peace talks, the rise in European freight rates has slowed down, and the market's expectations for shipping prices to peak are continuing to increase.

On August 8, the main contract of the Container Shipping Index (European Line) futures plunged, and the intraday decline once expanded to 15%.

Multiple contracts of the container shipping index (European line) futures listed on the Shanghai International Energy Exchange fell collectively. As of the close, the main contract EC2412 was 2754.9 points, down 15.03%. EC2408 and EC2410 fell 0.40% and 7.77% respectively. EC2502, EC2504 and EC2506 all fell by about 10%. Judging from the situation after the close of the 8th, EC2412 had a deep discount of nearly 20% compared with EC2410, which was significantly different from the previous characteristics of the off-season and peak season of the shipping market.

In the long run, the main contract of the container shipping index (European line) futures soared to 4763.6 points on July 4 this year, the highest point since its listing, and then continued to fall sharply, with a cumulative decline of 40% as of the 8th. From March to July this year, the main contract of the container shipping index (European line) futures once soared by more than 260%.

Among them, the impact of the weakening of spot freight rates is particularly obvious. As the seasonal weakening of cargo volume and the increase in supply pressure from overtime ships by shipping companies, spot freight rates continue to fall. The average quotes for wk32/33 are US$8,280 for large cabinets and US$8,180 for large cabinets, respectively, down US$150 and US$100 month-on-month.

Haitong Futures pointed out that the second reduction in Maersk wk33 opening prices also had an impact on market sentiment. The pace of price adjustment has accelerated recently, with shipping companies reducing prices by US$200-300 per round. It is expected that the central price of freight rates will move further downward in late August, and the frequency and magnitude of the downward adjustment will need to be observed in the future.

Huatai Futures pointed out that freight rates on Asia-Europe routes are usually higher in December than in October (except for 2021 and 2022). This is mainly because November and December are the peak seasons for shipments before the Chinese New Year, and these two months are the negotiation seasons for signing long-term contracts in the European line in the next year, so liner companies tend to actively adjust capacity prices. From the supply side, in view of the monthly delivery of large container ships, supply pressure is expected to be high in December this year, but the peak shipping season and liner companies' year-end price support may still exist, so the December contract price should not be excessively lower than that in October, and there is a risk of narrowing price spreads.