Market Intelligence [Square Newsletter] 2023 No.1

Economy

The OECD Composite Leading Indicator is dropping 18 consecutive months in the US, 16 in Europe, and 21 in China. The crude oil price is weakening due to the World Economic Outlook and strengthening of the dollar.

Sea Freight

The SCFI index fell to 1,061 points on the first week of 2023, a 79% decrease compared to its peak in January 2022. The gap for the global containers in 2023 is likely to widen greatly due to the worsening of the demand and the increase of the remaining supply.

Air Freight

The downturn of the jet fuel cost and the FSC is continuing following the weakening of the crude oil price. The TAC Index has been falling consecutively: 4 months in the Hong Kong-Europe route and 7 months in the Hong Kong-America route.

The OECD leading economic index is evaluated as a contraction phase because it is in a downward trend with less than 100.
Manufacturing PMI indicates that US’s PMI shrank for 2 months and Europe rose to 47.8 but continued to shrink for 6 months. China’s PMI continued to shrink for 3 months and fell to 47.0 as production plants were closed due to a surge of infections.

Global container shipping trend is that the demand/supply gap is expected to gradually decrease from 6.9%('22) → 6.3%('23) → 2.5%(‘24). Due to falling international oil prices, Jet Fuel declined 30% lower than the high point (Jun 22Y) and FSC fell 51% lower than the high point (Jun 22Y). However, Jet Fuel increased 38% and FCS rose 127% year-of-year.