Global container shippers may find it challenging to raise freight rates this month because of oversupply problems caused by slow seasonal demand this quarter, according to reports issued by brokerage houses.
Major container shipping companies in Taiwan, including Evergreen Marine Corp (長榮海運) and Wan Hai Lines Ltd (萬海航運), have announced their rate hike programs, or rate restoration plans, which took effect yesterday.
Evergreen Marine, the owner of the nation’s largest container shipper fleet, is set to hike rates for its Far East and Indian subcontinent to Europe and the Mediterranean region by US$450 per twenty-foot equivalent unit (TEU), or by US$900 per forty-foot equivalent unit (FEU).
Wan Hai, meanwhile, unveiled a price increase plan on all dry cargoes originated from Asia, by US$300 per TEU, or US$600 per FEU, for routes to Middle East and Pakistan, as well as by US$200 per TEU, or US$400 per FEU, for routes to India and Sri Lanka.
It marked the sixth consecutive price increases this year by major global container shippers.
Evergreen Marine president Anchor Chang (張正鏞) said the price hike reflected an uptrend in demand in the container shipping industry this quarter. Chang expected strong sentiment will last to next quarter.
OVERSUPPLY
“With expected oversupply in the shipping sector near term, it will be challenging to fully pass on the higher fuel costs unless the industry cuts more capacity,” JPMorgan analyst Corrine Png (方華婷) said in the report.
Capital Securities Corp (群益證券) shared JPMorgan’s views, saying freight rates in the container shipping industry may be less pressured next quarter, as the number of idling vessels remained relatively low, with the amount of new capacity added in the second half of this year also higher than the first half.
That may make major container shippers in Taiwan see profitability in October-to-December period decline from three months ago — the traditional high season for the industry, Capital Securities said in its report.
However, SinoPac Securities Investment Service Co (永豐投顧) kept a more optimistic outlook for the container shipping industry.
CONTROLLING CAPACITY
Despite a low level of idling vessels, SinoPac Securities said major global container shippers have been indirectly controlling capacity by lowering speed and not operating extra services during the peak period.
In addition, the economic recovery in the US and Europe may help support the rate restoration program, SinoPac said in its report.
SinoPac Securities expects the three major container shipper in Taiwan — Evergreen Marine, Wan Hai and Yang Ming Marine Transport Corp (陽明海運) — to return to the black in the third quarter.
However, for the whole of this year, Yang Ming may still suffer a net loss of NT$2.66 billion (US$88.72 million) because of heavy losses made in the first half, SinoPac Securities forecast.
However, Evergreen Marine and Wan Hai would have a better chance to make profits for the entire year, the brokerage said.
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
Advanced Micro Devices Inc (AMD) suffered its biggest stock decline in more than a month after the company unveiled new artificial intelligence (AI) chips, but did not provide hoped-for information on customers or financial performance. The stock slid 4 percent to US$164.18 on Thursday, the biggest single-day drop since Sept. 3. Shares of the company remain up 11 percent this year. AMD has emerged as the biggest contender to Nvidia Corp in the lucrative market of AI processors. The company’s latest chips would exceed some capabilities of its rival, AMD chief executive officer Lisa Su (蘇姿丰) said at an event hosted by
AVIATION: Despite production issues in the US, the Taoyuan-based airline expects to receive 24 passenger planes on schedule, while one freight plane is delayed The ongoing strike at Boeing Co has had only a minor impact on China Airlines Ltd (CAL, 中華航空), although the delivery of a new cargo jet might be postponed, CAL chairman Hsieh Su-chien (謝世謙) said on Saturday. The 24 Boeing 787-9 passenger aircraft on order would be delivered on schedule from next year to 2028, while one 777F freight aircraft would be delayed, Hsieh told reporters at a company event. Boeing, which announced a decision on Friday to cut 17,000 jobs — about one-tenth of its workforce — is facing a strike by 33,000 US west coast workers that has halted production
TECH JUGGERNAUT: TSMC shares have more than doubled since ChatGPT’s launch in late 2022, as demand for cutting-edge artificial intelligence chips remains high Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday posted a better-than-expected 39 percent rise in quarterly revenue, assuaging concerns that artificial intelligence (AI) hardware spending is beginning to taper off. The main chipmaker for Nvidia Corp and Apple Inc reported third-quarter sales of NT$759.69 billion (US$23.6 billion), compared with the average analyst projection of NT$748 billion. For last month alone, TSMC reported revenue jumped 39.6 percent year-on-year to NT$251.87 billion. Taiwan’s largest company is to disclose its full third-quarter earnings on Thursday next week and update its outlook. Hsinchu-based TSMC produces the cutting-edge chips needed to train AI. The company now makes more
RSS