A leading UK exporter has said he expects shipping rates to remain largely stable during 2015.
The falling price of oil means there is less pressure on freight companies to increase their rates and new vessels coming into service will mean more container spaces.
Ranjit Baxi, chairman of J&H Sales International Ltd, told MRW: “With the world’s largest container ship coming into service during this quarter, the 19,000teu-plus CSCL Globe, and a further 10 vessels of similar size projected to enter service during 2015, sea freight rates are forecast to remain more stable for the medium term.”
Baxi said these 11 new ships will mean an estimated net increase of 4,000 containers per month. He says shipping companies have not indicated any increase in freight rates during the first quarter.
Baxi mentioned the update on the price of oil included in the latest BIR World Mirror, saying: “News of weakening oil prices was welcomed by the recycling industry as this would not only benefit the sea freight market but also haulage and general production costs.”
Recovered paper merchants have welcomed the possibility of stable shipping rates after a depressed fourth quarter of 2014 with weakening prices for OCC and mixed paper exports both in Europe and the US, partly due to poor demand from China, which recorded its lowest GDP growth in 24 years.
Demand for other export secondary grades, such as news and pams, sorted office paper, multigrade and OIN, remained stable but with weakening prices.
But the positive sentiment was not shared by textile merchants and those dealing in recovered plastics.
Oil exporting countries that are also key markets for textile exporters face weaker currencies, bearing down on imports.
Recovered plastics merchants have expressed concerns that, with virgin material being relatively cheaper, businesses dealing in recycled polymers will be hit.