In January 2024, the FBX container futures market was subject to geopolitical events, volatile indices, and forward curve movements, dramatically shifting the landscape for traders and hedgers. The month unfolded against a backdrop of heightened political tensions in the Middle East and Red Sea, notably impacting all routes, particularly the FBX11 and FBX13. The extraordinary jump in FBX11 from 1590 on the last print of 2023 to 4042 for the first print of 2024 was sustained and indeed strengthened, with it standing at 5340 on 29 January. FBX13 showed similar movements, with 5401 on the last print of 2023 to 5175 for the first print of 2024, standing at 6345 on 29 January 2024. FBX01 and FBX03 showed similar rises across the same period.
There was a mixed picture on the backhaul routes. FBX02 stayed rangebound in January with lows of 339, highs of 494, and closing on 29 January at 388. Whilst still displaying volatility, prices have reflected out-of-position assets, keeping the extraordinary percentage rises in routes geographically impacted by vessels avoiding the Red Sea. The same was not true of FBX12 (North Europe to China/East Asia) which traditionally navigates through the same Red Sea region. The end of December saw the index at 312 whilst the first print in January heralded a huge 707 print with levels touching 1374 on 16 January and finishing at 1256 on 29 January.
Sellers of all routes have begun to emerge, with larger volumes being offered – particularly further out on the curve on FBX11 and FBX13, with the Cal25 and Cal26 strips being offered in the market as well as the H2 ’24 strip. FBX11 Cal25 was offered at $4500 and FBX13 Cal26 was offered at $5250 in some size.
Sellers of all routes have begun to emerge, with larger volumes being offered – particularly further out on the curve on FBX11 and FBX13, with the Cal25 and Cal26 strips being offered in the market as well as the H2 ’24 strip. FBX11 Cal25 was offered at $4500 and FBX13 Cal26 was offered at $5250 in some size. FBX01 has seen interest expressed on both the bid and offer side, with a firm offer on the Q2+Q3 strip at $4300 being shown earlier in the month. Bids were sought on the balance of 2024 on FBX01, FBX03, FBX11 and FBX13; buyers have thus far declined to show their hand on these, although interest has been indicated. The dramatic rise in the index has caught buyers unprepared and adjusting to the new global reality. Expect new bid levels to emerge in the next couple of weeks.
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Significant risk premium is being sought from sellers on all routes, for obvious reasons. This seems justified given the wider context and ongoing volatility.
Significant risk premium is being sought from sellers on all routes, for obvious reasons. This seems justified given the wider context and ongoing volatility. Unless the broader environment begins to show signs of stability, expect a significant risk and time premium to be built into both flat and futures prices.
January 2024 unfolded as a month marked by heightened geopolitical tensions, reflected in the FBX container futures market’s indices and forward curves. The challenge of balancing risk and opportunity in an environment shaped by unpredictable geopolitical events has rarely been so much in focus. The container market dynamics observed during this period underscore the need for strategic decision-making and risk management in volatile this broader environment.
Source: Baltic Exchange, Freight Investor Services