Spot rates: will they follow the year of the Dragon or Monkey?
Container spot rates follow a familiar boom and bust trend before and after Chinese New Year. Drewry examines recent trends to give a clue to the future direction of rates when Year of the Dog celebrations commence.
That container spot rates have increased since the start of year should not be a surprise to anyone. In every year since Drewry launched the World Container Index (WCI) spot prices on the key East-West corridors have increased during the lead up to Chinese New Year (CNY), which lands in and around the end of January/mid-February. The shutdown of factories during festivities means that shippers front load cargoes ahead of time, causing a demand spike that lifts prices.
As of last Thursday (8 February) the composite benchmark rate for the WCI that covers eight major East-West trades, was $1,512 per 40ft container, a rise of 25% on the year-end 2017 figure six weeks prior. Similar increases were seen in both of the previous two years six-weeks out from CNY (see Table 1).