Author丨Dong Peng.
Editor丨Bao Fangming.
The situation in the Red Sea has fermented, and many international shipping companies have chosen to suspend Red Sea navigation or bypass the Cape of Good Hope, and transportation costs and spot freight rates have followed, and have been transmitted all the way to the shipping and commodity markets.
Maersk, the world's largest container shipping company, has suspended all sailings for ships passing through the Bab el-Mandeb Strait.
On December 21, the main EC2404 contract of the domestic container transportation index (European line) ** rose again this week, and the cumulative increase of the contract (settlement price) this week has reached 3572%。
Sudden events superimposed on factors such as the off-peak season of shipping, caused the market to increase the divergence between long and short, and this week's European line container shipping index** The open interest and trading volume of the ** month-on-month ** have increased significantly.
It should be noted thatThe European line container shipping index** is very different from the traditional bulk commodities, the former is cash delivery, and the latter is physical delivery, which makes the transmission mechanism of the two significantly different.
The reason why the existing commodities and spot contracts can drive the volatility of the forward contract is that the physical goods of the spot commodity can be stored in the far month, and form arbitrage and delivery anchoring, which is the fundamental reason why the forward contract can follow the trend of the spot contract. Huang Liunan, a shipping analyst at Guotai Junan, pointed out that this is temporarily unachievable in any kind of non-physical derivatives, which also means that the long-month contract of shipping derivatives should be relatively weak for spot anchoring.
In addition, EC2404 is already the most recently delivered contract, but there are still more than 4 months before its delivery, during which it still needs to face many uncertainties such as how the Red Sea incident will be interpreted, whether shipping companies will resume sailing, and spot freight rate fluctuations.
It is also in the context of the above-mentioned market volatility and increased risks that the International Energy Exchange issued a "package" of regulatory measures including adjustment of margin, price limit and handling fee for ** contracts such as EC2404 on December 20 to prevent and control possible market risks.
Episodic events with short-term perturbations
Occasional events caused by geopolitics are important variables affecting market volatility, and the Red Sea incident is a typical case.
The Red Sea is a necessary route for transport via the Suez Canal.
Since mid-November, the Houthis have expanded their strikes against Israeli targets, beginning strikes on "Israeli-linked vessels" in the Red Sea, attacking a number of Israeli-linked merchant vessels.
Since December, the targets have escalated to all ships bound for Israeli ports, and from 9 to 15 December, container ships, including Maersk and Hapag-Lloyd, have been attacked. Immediately, a number of shipping giants announced that they would suspend the transportation of all Red Sea container ships or sail around the Cape of Good Hope.
The Red Sea (Suez Canal) route is the busiest route in the world, and the above events have also led to tight capacity and higher costs on the Far East-North Europe route, resulting in higher spot freight rates.
In this regard, Guotai Junan** pointed out on December 21, "At present, the market has announced that the booking rate for early January next year is 2000-2200 US dollars TEU and 4000+ US dollars FEU, which is about 2000-2100 points when converted into SCFIS (European line) index." ”
Transmitted to the market, it is the recent increase in the last International Energy Exchange Container Index (European Line).
On December 18, the main contract of EC2404 rose by 1276%, closed at the limit price on December 20, but did not constitute a unilateral market, and the limit was again on December 21.
According to the ** price and settlement price, the cumulative increase of EC2404 contracts this week has reached 3886% and 3572%。
The increase in volatility has been accompanied by a significant increase in market participation.
The total open interest of the container shipping index (European line) ** increased from 11 on Friday70,000 lots has increased to 21 today50,000 hands, and the trading volume in the same period increased from more than 200,000 hands in the early stage to more than 500,000 hands, and it once reached 87 on December 2050,000 lots.
It is also in the context of large market volatility caused by accidental events that temporary regulation has been carried out at the exchange level.
On December 20, the Shanghai International Energy Exchange announced that since the settlement on December 21, the trading margin ratio of EC2404 and EC2406 contracts will be adjusted to 14%, the price limit will be adjusted to 12%, and the transaction fee of all contracts such as EC2404 will be adjusted to 4/10,000 of the transaction amount.
The above measures are the regular regulatory tools of domestic ** exchanges. Raising the margin can increase the cost of investors' positions, raising the range of the rise and fall board is conducive to the market's spontaneous price adjustment, and raising the handling fee standard for closing the position is to increase the transaction cost of investors, so as to reduce the heat of market speculation.
Taking December 21 as an example, the above-mentioned container shipping index (European line) ** margin implemented by a leading domestic company has reached 25% (two parts of the exchange + ** company), coupled with the daily debt-free settlement system of the market, the risk of investors' positions has been greatly reduced.
Lei Yue, a researcher at Haitong ** shipping, also pointed out that "adjusting the handling fee can better calm the overheated sentiment in recent days, and play a rapid role in risk response and prevention for the overall operation of the market." ”
In the past few days, the volume and price of the container shipping index (European line) have increased, on the one hand, due to the Red Sea incident, which has affected the shipping schedule of the Asia-Europe route, and on the other hand, it is also due to the overall sentiment of the market. Fan Changping, secretary of the board of directors of Worldwide Logistics Group, commented that the increase in margin and price limit will help to further guide the return of market sentiment.
According to the risk control rules of the exchange, after the price limit of the EC2404 contract on December 21, the margin ratio and price limit on December 22 will be adjusted accordingly.
Namely,On the basis of the trading margin ratio of 14% and the price limit of 12%, they will be increased by 3 percentage points to 17% and 15% respectively.
The excess capacity may exceed that of 2016
It's not hard to see,The trigger for this round is the escalation of the situation in the Red Sea and the suspension of shipping companies, which is an accidental event caused by geopolitics, and there is uncertainty about whether it can continue for a long time.
First of all, the container shipping index (European line)** was officially listed on August 18 this year, and the first batch of listings totaled 5 contracts including EC2404 and EC2406, of which the closest to delivery is the current main EC2404 contract.
The last trading day of the EC2404 contract is "the last Monday of the contract delivery month", that is, April 29, 2024, which is still 4 months away.
During the period, how to interpret the Red Sea incident, whether the shipping giant will resume sailing and other variables will affect the volatility of the container shipping market.
Secondly, from the point of view of the container transportation index (European line)** contract itself, due to many differences with traditional commodities**, the trading logic of commodities** cannot be completely followed.
Judging from the trend of the EC market, the market has been more enthusiastic about EC multi-allocation in the past week based on this prospect of price increases. Although this kind of multi-allocation enthusiasm that follows the fluctuations of spot ** may continue in the short term, it is also extremely unstable and may quickly reverse at any time. Huang Liunan pointed out.
Throughout the development of various derivatives markets, the construction of trading strategies must be based on certainty as the logical starting point.
He also pointed out that the fundamental reason why the existing commodity spot fluctuations can drive the volatility of forward contracts is that the spot commodity can be stored in the far month and form arbitrage and delivery anchoring, which is the fundamental reason why the forward contract can follow the trend of the spot market, which cannot be achieved in any kind of non-physical derivatives for the time being.
On the other hand, the container shipping index (**First of all, the subject matter of the contract is the Shanghai export container settlement freight index, which adopts the unit of "index point" ** similar to the stock index**, and its delivery method is cash delivery, rather than the physical delivery commonly used in commodities**.
This means that the mechanism of commodity spot driving is not applicable to shipping derivatives, which have weak anchoring at sight and forward.
Of course, it is understandable that many market participants who are accustomed to physical trading are anchored to spot trading when they first participate in EC trading, and this following may still be strong under the herd effect. Huang Liunan said, but from the perspective of the certainty of strategy construction, it is fragile and may reverse at any time.
Thirdly, from the perspective of medium and long-term supply and demand, and following the above-mentioned principle of "the construction of trading strategy is based on certainty as the logical starting point", Huang Liunan believes that the downward trend of container transportation has not changed, and the core logic has the following aspects.
First, the certainty of capacity delivery. In 2023, the new capacity of the container transportation market will increase by about 78% and 10 in 20241%, which is about a new high in the past 10 years;
Second, there is the certainty that export demand is difficult to improve. From the perspective of the inventory cycle in the United States and Europe, the next six months may still be in the destocking cycle (end), and it is difficult to improve the transportation demand side
Third, the certainty of the off-season nature of the 2404 contract. Even if there is a reversal in demand, the probability of appearing in the 2406 or 2408 contract is relatively greater, and the probability of the freight rate in January and March is likely to be downward
Fourth, the certainty of downside. In 2016, the European line** fell to a low of nearly $200 TEU, corresponding to a SCFIS index of about 250-300 points, which is much lower than the current point. The overcapacity in the coming year is likely to exceed that of 2016.
From the perspective of the forward curve of the disk, there is also a clear differentiation of the container transportation index (European line) in the near month and far month.
In the past two days, the main EC2404 contract closed at the limit price, while most of the non-main contracts such as EC2406 **.
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Editor: Jiang Peipei, intern: Song Jiayao.
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