The four words “prices start from the ground up” are enough to describe the current global shipping market.
Moreover, starting from July 1st, more and more shipping companies will join this price increase “queue”: some companies have resorted to “three price increases” within half a month. With the cruel move of “continuous increase”, some companies even set the highest single increase in the history of shipping…
On June 18, the Shanghai Shipping Exchange announced that the Shanghai Export Container Index (SCFI ) was 3748.36 points, a record high, an increase of 358% compared to the lowest point of 818 points last year. This index reflects the direction and extent of changes in settlement freight rates in the spot shipping market, which means that shipping prices have increased several times year-on-year.
As of June 22, although the Baltic Dry Index (BDI) fell back to 3119 points, on June 18, the BDI rose for seven consecutive days to close at 3267 points. It broke through the high record since early June 2010 and set a new high in eleven years.
BDI is known as the “barometer” of the world economy and is calculated based on the weighted spot freight rates of bulk carriers on several major routes. It can be seen that global shipping costs are rocketing to the top.
Sequelae of the “Big Ship Jam”
Three months ago, on March 23, Suez A large cargo ship ran aground in the canal, causing a world-famous “ship jam of the century”.
Since then, the “sequelae” of global port congestion caused by the Suez Canal ship blockage has gradually been transmitted to China. Since May, as hundreds of container ships affected by previous ship jams have arrived in China, major container ports in China such as Shanghai Port and Shenzhen Yantian Port have experienced severe congestion.
Shanghai Port is the world’s largest container port. According to reports, the port has been operating at full capacity for a long time, but congestion continues, with the average daily operating volume exceeding 130,000 standards. containers, once reaching 149,500 TEUs, close to the historical record.
Shenzhen Yantian Port, another major container port in China, has also welcomed a large number of ships from European routes to the port, resulting in slow pick-up and return of containers at the port, a large increase in the number of containers in the yard, and a large increase in containers entering the terminal. There was a long line of trucks.
At the same time, the sudden “new epidemic” has “added fuel to the fire” to the congestion situation at Shenzhen Yantian Port. Yantian Port is one of the most important ports in South China, with an annual container handling capacity of more than 13.35 million TEUs and 107 navigation routes, mainly European and American routes. In 2021, Yantian Port has 38 American routes, accounting for about a quarter of the cargo volume of China’s trade with the United States. After the outbreak of the epidemic, the freight rates of the American routes were directly pushed up.
Lars Jensen, a shipping analyst at Vespucci Maritime, publicly stated that the number of containers blocked at Yantian Port has exceeded the number of containers blocked in the Suez Canal three months ago.
As the epidemic spreads in many areas of Guangdong, congestion has occurred in many ports in South China. As a result, China’s export goods had to continue to move northward, and the overall shipping freight rate was pushed up.
The second half of the year is the traditional peak season for shipping, including the Western Halloween, Black Friday shopping festival, Christmas and other goods that will be sent out one after another from August to December. Analysts believe that coupled with multiple adverse factors such as difficulty in booking space, serious port congestion, and unstable shipping schedules, the shipping situation will become more tense in the second half of the year.
Since May, Hapag-Lloyd, Mediterranean Shipping Company (MSC), COSCO Shipping Lines, Matson, Kanbaru Kisen and other shipping companies have announced several rounds of fee adjustments. Increase notice.
Compared with a year ago, the average shipping cost has increased several times. What’s more, the FAK rate from Asia to Northern Europe is close to US$20,000 per 40 feet-this is in line with the The spot rate increased by 1,000% compared to a year ago, which is a 10-fold increase year-on-year.
A British consulting firm stated that many British importers will find themselves in trouble, with freight charges eight times higher than last year, and therefore bankruptcy is expected in 2022.
“Outrageous shipping costs” have also led to the cancellation of many orders from China, which analysts say has had a significant impact on retailers who are unable to move inventory at increased retail prices. Influence. For example, The Entertainer, a well-known British toy chain, decided to stop importing stuffed animal toys from China because the retail price of the toys was too high due to the huge shipping costs.
The hidden concern of “imported inflation”
Due to the continuous increase in shipping costs, the performance of related shipping companies has directly increased. Some analysts predict that Maersk, the world’s No. 1 shipping company, will have profits this year exceeding the total of the past seven years.
Previously, Maersk had significantly raised its full-year profit forecast for 2021 to double the previous level, saying that the company’s performance was being continuously boosted by the “blowout” of demand levels. . Its latest stock price as of June 22 is already three times the lowest point in March 2020.
Coincidentally, the share price of COSCO Shipping Holdings (601919.SH), a leading company in the domestic shipping industry, reached a maximum of 30 yuan on June 23, which was 10 times the lowest point in 2020. .
In the first quarter of 2021, the 12 A-share listed shipping companies achieved a total revenue of 83.29 billion yuan and a net profit attributable to parent companies of 17.57 billion yuan. Nearly 60% of shipping companies increased their sales volume in a single quarterThe net profit of the parent company doubled year-on-year.
In addition to COSCO Shipping Holdings, airlines such as Ningbo Shipping (600798.SH), Bohai Ferry (603167.SH), Shenghang Holdings (001205.SZ) have already announced their first half performance Pre-increase. Among them, Ningbo Shipping has the highest growth rate, and its net profit in the first half of the year is expected to increase by 498.17% to 747.41% year-on-year.
Although the performance of shipping companies is “proud”, the price may be that the macroeconomy is exposed to the risk of imported inflation.
Since 2021, international commodity prices have continued to rise, among which commodities such as iron ore and copper have increased significantly, significantly deviating from the fundamentals of supply and demand. In response, China’s National Development and Reform Commission and relevant departments have successively adopted strong supervision to crack down on market and capital speculation.
China is the country with the largest demand for commodities in the world, and nearly 70% of the world’s iron ore flows to China. Data from the General Administration of Customs of China show that the volume of bulk commodities imported into China increased significantly in the first five months. Among them, 472 million tons of iron ore were imported, an increase of 6% year-on-year; 6.097 million tons of steel, an increase of 11.6%; and 38.234 million tons of soybeans, an increase of 12.8%.
At the same time, the prosperity of commodity demand is also reflected in the recent listing trend of the Baltic Dry Index (BDI).
In the past two or three years, the trend of BDI has been basically consistent with the trend of commodity prices. So, do commodity prices drive the shipping price index, or do changes in shipping prices affect international commodity prices?
Generally speaking, shipping prices are subordinate to commodity prices. After all, commodity demand is the end demand of the global market. But judging from the current situation, changes in shipping capacity are in turn affecting commodity prices.
Recently, GF Securities released a research report stating that rising shipping prices are an important driver of rising global inflation this year.
The report believes that imported inflation may be one of the main reasons for the rise in inflation in many countries since March this year, and imported inflation is affected by shipping prices. “The current global imported inflation is indeed related to the rise in prices caused by the contradiction between supply and demand of global tradable goods in the past year, but changes in the price of tradable goods are not the only factor. The rise in global transportation costs after the epidemic has also contributed to imported inflation. .”
However, GF Securities’ prediction is that global shipping capacity will gradually reach a balance between supply and demand in the second half of 2021, and there will be a risk of temporary excess in the second half of 2022. Therefore, shipping prices have an impact on inflation in various countries. The impact may turn moderate in the second half of 2021 and negative in the second half of 2022. </p
