A growing number of analysts are pointing to weakening container volumes – especially in longer term forecasts. The key factor is a softening in consumer demand driven by inflation.
LOGISTICS
Demand is still soft on the China-US route, as uncertainty remains surrounding whether a spike in shipments and a strong peak season are expected, said Flexport.
Trans-Pacific container lines are adding capacity ahead of an expected early peak season, but blank sailings will continue to challenge North American importers even as Shanghai reopens, advised Journal of Commerce.
If the net underlying demand actually deteriorated during the Shanghai lockdown, or enough importers had already pulled orders forward, then there may be no surge in the short term and less chaos and pressure on rates during peak season when compared to last year’s peak, said Freightos.
Congestion in EU ports are resulting in late sailings returning to Asia, causing delays and blank sailings, according to UPS.
China-Europe routes are forecast to see a strong Q3 with a summer peak. However macro level headwinds include weakening consumer confidence and the Russia-Ukraine war could soften demand, per Flexport.
Freight carried through Indian airports have vastly increased over the past year with more expected growth on the horizon, per UPS.
As Shanghai congestion begins to ease, more capacity will be added to routes from Latin America to China, said UPS.
CMA CGM, a maritime and logistics company, has launched a new 2 week service from Asia to the western ports of Latin America.
SOURCING
Finding a reliable source of high quality, sustainable cotton yarn has gotten a lot more challenging. There’s a group of mills that are now making that easier. Read more
PODCAST
How to Keep Your Head – Even in Uncertain Markets
What’s causing markets to move in directions that seem to have even the best analysts scratching their heads?
In this podcast K. D. Angle, a futures trader and author of “Guillotine Investing: How to Keep Your Head While Others are Losing Theirs” shares his insights on what’s happening, why it’s happening – and what investors should consider when trying to interpret the markets.
What you’ll learn:
- How have markets changed over the past decades – and what actually hasn’t changed?
- What should most people be looking to invest in now?
- What most people often misunderstand about market performance.
- Is crypto-currency a viable investment alternative?
ENERGY
- WTI crude futures rallied to above the $119-per-barrel mark while recording their seventh weekly advance after a keenly anticipated OPEC+ meeting last week delivered only a modest increase in output.
- Goldman Sachs said that prices needed to rally further before achieving the demand destruction required for market rebalancing.
MATERIALS
- Surging oil prices have pushed up PSF prices, which is driving higher prices for synthetic fiber yarns.
- Cotton prices are down more than 10% from an 11-year high of $158 hit in early May.
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