SHIPPING: Asia-USWC container rates fall; Asia-USEC rates hold steady

HOUSTON (ICIS)–Global average container rates ticked lower last week, along with rates from Shanghai to the US West Coast, but rates from Asia-New York held steady during what is typically the slow season for transpacific ocean freight.

Shipping analysts said rates remain elevated for several reasons, most significantly the frontloading of imports ahead of possible renewed labor strife at US Gulf and East Coast ports.

The possible implementation of new tariffs proposed by the incoming Trump administration is also keeping upward pressure on rates.

Global average rates fell by 2% for the week ended 29 November, as shown in the following chart from supply chain advisors Drewry.

The following chart from Drewry shows the rates from Asia to both US coasts.

Drewry expects spot rates to be relatively stable this week.

Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said inland truck and rail rates could also face upward pressure as tariffs aimed specifically at Canada and Mexico could lead to increased cross-border volumes.

Levine said congestion remains minimal at US ports, including the main West Coast port of Los Angeles/Long Beach.

Kip Louttit, executive director of the Marine Exchange of Southern California (MESC), said container ship traffic through the port continues to be steady with 67 container ships enroute and 12 scheduled to arrive in the next three days.

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 RATES STEADY
Overall, US chemical tanker freight rates were largely stable this week for several trade lanes, with the exception being the USG-to-Brazil trade lane, as that market picked up this week following activity during the APLA conference in Colombia.

Part space has limited availability as most owners are awaiting contract of affreightment (COA) nominations.

The USG-Asia trade lane remains steady as spot tonnage remains readily available and multiple cargoes of glycol and styrene are interested in December and January loadings, supporting the market.

Similarly, on the transatlantic front, the eastbound leg remains steady as there was limited space available which readily absorbed the few fresh enquiries for small specialty parcels stemming from the USG bound for Antwerp.

Various glycol, ethanol, methyl tertiary butyl ether (MTBE) and methanol parcels were seen quoted to ARA and the Mediterranean as methanol prices in the region remain higher.

Additionally, ethanol, glycols and caustic soda were seen in the market to various regions.

However, it is also clear that space is becoming very tight until the end of the year, keeping rates firm.

The CPP market firmed, limiting the number of tankers offering into the chemical market, thus keeping rates stable.

Additional reporting by Kevin Callahan