News / Concern over rates peak and Hamas ceasefire 'spooks' container futures

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Reports of renewed discussions for a ceasefire between Israel and Hamas have startled shippers and operators, causing container futures indices to drop.

Yesterday, container freight index futures for the China-North Europe lane, traded on the Shanghai International Energy Exchange, closed lower, with all contracts ending lower from 1 July.

The largest week-on-week drop was observed for the EC2412 (December 2024 contract), which closed at 3,725 points, down 12% from 1 July, while the EC2502 (February 2025) contract closed at 3,308 points, 11% down on 1 July.

Linerlytica noted that four out of the six contracts, EC2412, EC2502, EC2504 (April 2025) and EC2506 (June 2025) hit the daily floor of 16%. Today, the daily floor will be adjusted to 19% for contracts expiring in December.

Linerlytica suggested that the futures market was “spooked by concerns that freight rates have peaked amid Middle East ceasefire risks”.

On Saturday, Hamas officials told news outlets it could reconsider its insistence on a permanent ceasefire before releasing hostages still detained in Gaza – although another Israeli attack on Gaza yesterday may have placed negotiations at risk.

Iran-backed Houthi rebels have been attacking ships crossing the Red Sea in retaliation for Israel’s war in Gaza, and any ceasefire could restore stability to Suez Canal transits. Currently, at least 90% of containerships are rerouting round the Cape of Good Hope, tying up tonnage and pushing up freight rates.

Resuming Red Sea sailings would normalise the market and, possibly, release excess capacity.

While futures trading appeared to reflect concerns of a ceasefire, container shipping stocks appeared less affected. The most affected container shipping stock was Zim, whose shares fell 15% yesterday on the NYSE, closing at $18.76.

HMM’s stocks closed 1.58% lower today, at KRW18,050 ($13.05), while Wan Hai shares ended 1% lower, at TW$77.20 ($2.37). The share prices of Yang Ming and OOIL dipped less than 1% when trading ended.

There is also a belief that the pace of increase in freight rates is slowing. On Friday, the Shanghai Containerised Freight Index also showed the Shanghai-North Europe dipped 0.5% from 28 June, to $4,857 per teu.

Linerlytica said: “Although carriers successfully pushed ahead with the 1 July rate hikes, cracks have appeared in their ability to secure further rate increases, as the additional capacity introduced into the US West Coast, North Europe, South America and Middle East have alleviated the capacity pressure on these routes.

“Despite this, freight rates will remain elevated until the end of the peak season, which could last until September.”