Import and Export News-2024-08-12- Waymore Tools

1. According to preliminary data released by the German Statistical Office on the 8th, the United States became Germany's largest trading partner in the first half of 2024. During this period, the total import and export trade between Germany and the United States amounted to approximately 127 billion euros.

2. The preliminary statistical report on the balance of payments released by the Japanese Ministry of Finance on the 8th showed that despite deficits in both goods trade and service trade, Japan's current account surplus in the first half of the year increased by nearly 60% due to a substantial rise in overseas investment income.

3. IDC reported that India's wearable device market declined for the first time in history, with shipments falling 4.7% in the first half of the year to 55.1 million units. The primary reasons for this decline include suppliers' cautious stocking, a focus on clearing old inventory before the start of the holiday season, and the lack of new products in the market.

4. TrendForce noted that with the iteration of AI chips, the HBM (High Bandwidth Memory) capacity carried by a single chip has significantly increased. Nvidia is currently the largest buyer in the HBM market, and it is expected that after the launch of products such as Blackwell Ultra and B200A in 2025, its procurement share in the HBM market will exceed 70%.

5. Sigmaintell reported that due to market maturity and low economic growth, the car replacement cycle has not significantly shortened. In 2024, global car shipments are expected to reach about 91 million units, achieving a modest year-on-year growth of around 3%. The growth rate is anticipated to slow further after 2025.

6. The Thai Board of Investment announced on the 8th that it has approved incentives to promote investment in joint ventures in the automotive parts sector, applicable to the manufacture of internal combustion engines, hybrid vehicles, and electric vehicle parts. The new joint venture must invest no less than 100 million baht in the production of automotive parts, and it should be jointly established by local Thai companies and foreign entities. According to regulations, the Thai partner must hold no less than 30% of the registered capital of the new entity.

7. South Korea announced a series of measures on the 8th to increase housing supply in an attempt to curb the rebound in the real estate market. The rise in housing prices has frustrated potential buyers and made the Bank of Korea cautious about shifting its policies.

8. According to a report by the BBC on the 7th, the British Royal Mint has built a factory dedicated to extracting precious metals such as gold from old circuit boards. The extracted gold will initially be used to make jewelry, and it may later be used to produce commemorative coins.

9. Interface News reported on August 7th that foreign media claimed HP is seeking to move more than half of its personal computer (PC) production out of China. HP China responded by stating that these were false reports and emphasized that China remains an indispensable and key link in HP's global supply chain.

10. Interface News also reported that Intel explored investment in OpenAI in 2017 and 2018. During that time, executives from both companies discussed various options, including Intel's potential purchase of 15% of OpenAI's shares for $1 billion in cash. However, Intel ultimately decided to abandon the deal.

11. On August 7th, the head of NASA's commercial manned project announced that two astronauts stranded on the International Space Station might have to wait until February next year to return to Earth. The astronauts were originally scheduled to return on June 14th, but their return has been repeatedly postponed due to issues such as thruster failures.

12. German chip giant Infineon announced that the first phase of its new factory, the world's largest 200mm silicon carbide (SiC) power semiconductor wafer facility, built in Kulim, Malaysia, has opened and is expected to start mass production in 2025. This factory will be the largest 200mm silicon carbide wafer facility in the world.

Today’s exchange rate:

Today's Insights: Has the shipping freight rate reached a turning point?

Has the shipping freight rate reached a turning point? The demand for shipping knives has shrunk, and the freight rates on major European and American routes have fallen The annual delivery of new container ships is expected to hit a new high Looking forward to the second half of the year

Has the shipping freight rate reached a turning point?

After experiencing a wave of sharp increases in shipping prices, the Shanghai export container comprehensive freight rate index has fallen by more than 10% in the past month since entering the traditional shipping peak season. With the concentrated delivery of container ships in the second half of the year and the shrinking global shipping capacity demand, what will be the future trend of the shipping market?

Xu Kai, chief information officer of the Shanghai International Shipping Research Center, said: "July is the traditional peak season for shipping. It is relatively normal that the increase in shipping costs should last until August and September, but from the relevant data of the booking platform, not only the US line, but also the European line is currently showing a downward trend, and the freight rate is reaching a turning point."

The demand for shipping knives has shrunk, and the freight rates on major European and American routes have fallen

The latest data from the Shanghai Shipping Exchange shows that the Shanghai export container comprehensive freight rate index has fallen for four consecutive weeks, dropping by more than 400 points from the recent high, a decline of more than 10%.

The main routes in Europe and the United States continue to decline. The freight rate (sea freight and sea freight surcharge) from Shanghai Port to the European basic port market is US$4,907/TEU, down 1.7% from the previous period; the freight rate from Shanghai Port to the Mediterranean is US$4,997/TEU, down 5.2% from the previous period; the freight rates from Shanghai Port to the West Coast and East Coast of the United States are US$6,245/FEU and US$9,346/FEU, down 6.3% and 2.2% from the previous period, respectively.

Some industry insiders have made a comprehensive analysis and believe that there are three main reasons for this round of freight rate decline:

First, the freight rate had risen for thirteen consecutive weeks before, and the recent drop is due to changes in market demand.
Second, small ships on the West Coast of the United States are competing for the market at low prices.
Third, the demand in Asia in July was affected by the early shipment of many customers in June, leading to no significant increase in cargo volume in July, which resulted in a continuous decline in freight rates.

According to data from the Ningbo Shipping Exchange, the latest European route freight index is 3505.8 points, down 1.9% from the previous period; the freight indexes of the East and West routes fell by 2.2% and 2% respectively from the previous period. The freight indexes of the East and West routes of the United States fell by 2.0% and 2.8% respectively from the previous period.

The Ningbo Shipping Exchange analyzed that, as far as the July data is concerned, the overall freight rates of the European and American routes peaked and then declined. Especially in mid-to-late July, affected by the Mediterranean Shipping (MSC) strategy of maintaining the freight rates of the West Coast routes unchanged, most liner companies have lowered the freight rates of the European and American routes. Due to the continuous investment of new capacity on the West Coast routes, the freight rates have fallen for four consecutive weeks.

In Xu Kai's view, the increase in shipping prices in the first half of this year was mainly related to the increase in inventory in major consumer markets such as Europe and the United States, and the Red Sea crisis causing ships to detour and slow down the supply of capacity. "From the supply side of shipping capacity, there is no obvious recovery in shipping capacity supply. The main reason for this wave of decline in shipping freight rates is likely to be the shrinkage of shipping capacity demand."

Faced with the shipping market where freight rates may continue to decline, several shipping companies have announced that the freight rate for each 40-foot container will be increased by US$1,000 from August 15. However, senior practitioners in the industry admit that whether the new price can be successfully implemented still needs further observation and confirmation.

The global manufacturing PMI in July was 48.9%, down 0.6 percentage points from the previous month, and has been below the boom-bust line for four consecutive months. "This basically shows that the global economy is falling into stagflation. In this case, the reduction in transportation demand may further suppress the increase in freight rates." Xu Kai said that the current price adjustment pace among liner companies is relatively consistent, and the price reduction trend is expected to be relatively gentle.

A relevant person in charge of the Ningbo Shipping Exchange said that the second half of the year generally ushers in the seasonal peak season of the shipping market. Although the early shipment of some commodities in the second quarter and the rapid increase in freight rates have brought the peak season forward, and the current freight rates on the European and American routes have reached a high level, the improvement in economic demand on the European and American routes may keep the transportation demand at a certain level in the second half of the year. Although the freight rates are likely to fluctuate and fall, the level after the decline is expected to be significantly higher than the same period last year.

The annual delivery of new container ships is expected to hit a new high

This year, the "delivery wave" of container ships continues. The Clarksons report shows that the delivery of new container ships in the first half of 2024 was 1.635 million TEUs, and the annual delivery volume is expected to hit a record high of 2.8 million TEUs this year, pushing the global fleet expansion rate to 9.7%. Due to the recent concentrated delivery of new ships, the proportion of container ship orders has fallen compared with the beginning of the year, but the subsequent capacity to be delivered still accounts for 20% of the current capacity.

The Clarksons report believes that the proportion of liner companies' own capacity has increased significantly in recent years. Among them, Mediterranean Shipping and CMA CGM have obvious expansion trends. In 2025, the liner alliance will form a new pattern. In addition, Veson Nautical analyzed that nearly 9 million TEUs will be put into use in the next few years, and the supply is expected to be in excess.

Most industry insiders said that with the investment of new container capacity, it is expected that the contradiction between market capacity supply and demand will be alleviated at the end of the third quarter or the fourth quarter, and freight rates will return to normal and reasonable levels.

Xu Kai believes that the delivery of new ships is expected, and the future development of the global shipping market still depends on the political and economic environment. Excess capacity is only one of the factors that influence the market. Accelerating the elimination of old shipping capacity, slowing down sailing, and reducing ship turnover are all ways to resolve excess capacity.

Looking forward to the second half of the year

Clarkson Research believes that under the background of further uncertainty in the global economic trend, increased geopolitical risks, reduced supply chain stability, and overall low growth in fleet supply, the shipping market segments may still show "differentiation" performance. Freight volatility will increase, and how to manage uncertainty will become the main theme of the market.