Guotai Junan Futures: The traditional off-season logic for the European market from March to April remains unchanged; investors should not blindly follow the bullish trend.

Guotai Junan Futures Chief Analyst Huang Liunan stated that recently, driven by risk aversion caused by Middle Eastern geopolitical conflicts and shipping companies’ announced price hikes, the container shipping index (European route) futures have surged continuously. We believe that the container shipping index (European route) is highly volatile, and investors should not blindly chase gains, as there is a significant risk of price fluctuations. From the current fundamentals, on the demand side, the recovery of cargo volume in the second half of March depends on the progress of factory resumption, which currently is average. On the supply side, the shipping schedules for March and April show that capacity supply has increased year-on-year, especially in the second half of March, indicating a high probability of oversupply. Under these circumstances, even if shipping companies announce price hikes in early March, the success rate of these prices being realized in the future is low, and prices are likely to decline again. In fact, every year after the Spring Festival, shipping companies often raise prices multiple times, but the success rate of these increases is low. For example, in March and early April 2025, leading shipping companies also announced spot European route freight hikes, but none of these were ultimately realized. Overall, since this week, near-term contract prices have already reflected the sentiment premium caused by the announced hikes and geopolitical conflicts sufficiently. Investors should be cautious of the risk of prices falling from high levels, as volatility may gradually increase.