Reports of renewed ceasefire discussions between Israel and Hamas have impacted container futures indices.
An unsettled market
On the Shanghai International Energy Exchange, container freight index futures for the China-North Europe lane fell, with all contracts closing lower since July 1. The largest drop was for the December 2024 contract, which fell 12% to 3,725 points, while the February 2025 contract decreased by 11% to 3,308 points.
Linerlytica reported that four contracts hit the daily floor of 16%, with the floor in the first week of July adjusted to 19% for December contracts. The futures market was unsettled by concerns that freight rates might have peaked due to Middle East ceasefire risks.
A ceasefire could restore Suez Canal stability and normalize market conditions.
Ceasefire could restore stability
Hamas officials suggested reconsidering a permanent ceasefire for hostage release, though recent Israeli attacks might jeopardize negotiations. Iran-backed Houthi attacks on Red Sea ships in retaliation for Israel’s Gaza actions have disrupted Suez Canal transits, with most ships rerouting around the Cape of Good Hope, increasing freight rates. A ceasefire could restore Suez Canal stability and normalize market conditions.
Container shipping less affected
Container shipping stocks were less affected, with Zim shares dropping 15% to $18.76 on the NYSE. HMM, Wan Hai, Yang Ming, and OOIL shares saw minor declines. The Shanghai Containerised Freight Index indicated a 0.5% dip in Shanghai-North Europe rates to $4,857 per teu.
Linerlytica noted that despite July 1 rate hikes, additional capacity in key routes has reduced pressure, although elevated rates may persist until the peak season ends in September.
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