November initially carried forward the October trend but ultimately up-ended as a result of the US presidential election injecting fresh volatility into the markets. Alongside this, good PMI figures out of China and a relatively stable sense of instability’ in the Red Sea keeps the markets aloft after the sell-off through May-October.

 

Key Points

Trump Trade: futures markets saw an immediate boost on Asia-Europe and Asia-US fronthaul’s, led by an expectation of tariffs and speculation of front-loading of cargo to beat tariff deadlines.

The situation in the Red Sea escalated with conflict between Hezbollah and Israel, compounding a priced-in impact of Red Sea closures (with ceasefire seeing little impact)

End-of-Month sell-offs following the Trump trade boost in futures prices had been stemmed by the end of the month.

Pending impacts on backhaul trades from US West Coast to Asia as tariffed export prices impact potential forward demand for US-China containerised trade.

 

Transpacific

Much of November on the Asia-US trade (at least in terms of Container FFAs) revolved around the result of the US presidential election early on in the month. Pre-election, the view was largely for ‘business as usual’ following a Democratic victory, which was quickly up-ended following the eventual Republican victory. Whilst front month futures remained flat (largely returning to their levels at the beginning of the year, still elevated well above the 2023 rate average) – FBX01 rolling front month value finishing at $4,450/FEU at the end of the month.

Q1 has been dramatically different, with post-election pricing jumping after a fairly consistent rally all the way through from mid-October to mid-November, retracing about half of the value on FBX01 Q1. In fact, Q1’25 is priced about half way up the mid-year rally, driven by front-loading of demand 

Q1 has been dramatically different, with post-election pricing jumping after a fairly consistent rally all the way through from mid-October to mid-November, retracing about half of the value on FBX01 Q1. In fact, Q1’25 is priced about half way up the mid-year rally, driven by front-loading of demand 

FBX11 Q1’25 Futures and Volatility Close-to-Close, BRAEMAR SECURITIES

FBX11 Q1’25 Futures and Volatility Close-to-Close, BRAEMAR SECURITIES

 

Asia-Europe

FBX11 Asia-North Europe and FBX13 Asia-Mediterranean have seen a far more pronounced and immediate reaction to election and tariff news, largely linked the routes holding the balance of liquidity and pricing on SGX and onshore on the INE – leaving the Asia-US routes behind

FBX11 front month futures saw a 14-day rally almost immediately post-election – up 40.3% up until 21 November before slumping to $4,850/FEU at the end of the month. As with Asia-US, Asia-Europe Q1’25 prices remain quick high, sustaining the rally post-election and just a fraction over half of the value seen earlier in the year during the early container freight peak period.

FBX11 front month futures saw a 14-day rally almost immediately post-election – up 40.3% up until 21 November before slumping to $4,850/FEU at the end of the month. As with Asia-US, Asia-Europe Q1’25 prices remain quick high, sustaining the rally post-election and just a fraction over half of the value seen earlier in the year during the early container freight peak period.

Even with the rally, the market continues to attract buyers, largely linked to contract negotiation periods coming in during Q4 and Q1’25. Next year’s budgeting has been attracting buyer interest, given the lack of clarity for 2025 container pricing, with offers available all the way down the curve through to the end of 2026 given the relatively healthy container freight rate. Comparing INE versus FBX, futures prices on the INE have been slow to converge with settlement indices. Chinese domestic retail speculative trading keeping futures prices elevated whilst underlying indices remain much lower. FBX11 conversely has remained quite well tied to the physical underlying, however sharp moves in the FBX at the end of the month amid a two-week spot tariff rates refresh for December temporarily bucked this trend.

About Peter Stallion, Freight and Energy Derivatives, Braemar

Peter Stallion heads up the Container Freight and Cross-commodity desks at Futures brokerage Braemar Securities Ltd - a part of Braemar Shipbroking. He started his career in air freight chartering, and helped launch FBX-settled Container FFAs, and has a passion for emerging risk management markets and the logistics industry.


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