The Shanghai Shipping Exchange released the latest weekly SCFI, Goldman Sachs released a research report saying.
While the overall SCFI remained a 0.5% QoQ growth, long-haul tariffs to Europe, the region most affected by Red Sea disruption, dropped 0.5% QoQ. This is the first WoW decline since mid-April, due to strong re-stocking demand in the US or Europe, longer supply chain migration and rush shipment.
Related NewsHSBC Global Research Expects Spot Container Freight Rates to Keep Rising Until End-3Q, Rates Maersk/ Evergreen Marine/ SITC Buy
The sector's YTD monthly supply increased by 0.9%. However, given that the leading indicator for June was 53.7 and feedback from shipping lines suggests that demand remains strong, Goldman Sachs did not expect a significant drop in July freight rates.
However, based on customer feedback, although they do not expect a big drop in freight rates this month, this may increase investor concerns that shipping rate is peaking out. In Goldman Sachs' view, this could have an adverse impact and trigger profit taking.
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