Negotiations between the US and Iran continue, but vessel traffic through the Strait of Hormuz remains low. US President Donald Trump declared on social media that the ceasefire had ended, and fighting resumed on Thursday after the two countries had previously signed a memorandum of understanding and agreed to a truce.

Read also: IMO Warns Ships to Avoid Strait of Hormuz After U.S. Strikes Iran

The Strait of Hormuz tracker, a free real-time dashboard that uses AI-powered analysis of current conditions, insurance markets, and diplomatic developments along with AIS data for vessel positions, recorded 34 ships passing through the waterway in the last day. During the ceasefire, daily traffic ranged from 40 to 50 vessels, compared with roughly 150 per day before the conflict began.

The disruption has heavily affected crude oil and chemical markets, since about one-third of global seaborne crude and up to 20% of the world’s total oil supply moves through the strait. Container shipping has been less affected, with less than 2% of global container capacity transiting the strait annually, though rates have risen partly due to higher bunker fuel costs.

Container Rates

Rates for container shipments from East Asia and China to the US kept climbing this week, though the pace slowed slightly. Spot rates to the West Coast reached as high as $7,400 per FEU (40-foot equivalent unit), and nearly $9,000 per FEU to the East Coast.

Although the Middle East situation remains uncertain, the primary factor pushing container rates higher is early peak season demand, as importers seek to get ahead of expected tariffs. The US Trade Representative began hearings this week as part of the process needed to implement new Section 301 tariffs before Section 122 tariffs expire on 24 July.

Judah Levine, head of research at online shipping marketplace and platform provider Freightos, said this tariff deadline is likely encouraging frontloading and an early start to the peak season on the transpacific. Levine noted that the current supply-demand balance allowed carriers to successfully implement 1 July general rate increases and peak season surcharges across major east-west routes, resulting in a total rise of more than $3,000 per FEU on transpacific trades since late May.

Levine added that carriers are adding capacity on the transpacific to handle the demand surge, but some forwarders believe frontload-driven demand may already be peaking. If demand eases and capacity increases, the significant mid-month rate hikes planned by some carriers might not hold, and prices could even start declining later in the month.

Peter Sand, chief analyst for ocean and freight rates and analytics firm Xeneta, described rates as being at extraordinary levels, with shippers still paying multiples of what they expected at the start of the year.

Supply chain advisors Drewry reported only three blank sailings scheduled on the transpacific trade route for the coming week, indicating tight capacity. Drewry stated that several carriers have announced general rate increases of $2,000 to $3,000 per FEU on the transpacific, effective 15 July, and predicted rates would stay high in the near term.

The New York Shipping Exchange Freight Index rose 9.9% to the West Coast and nearly 8.5% to the East Coast, while the Shanghai Containerized Freight Index, which tracks rates for containers leaving Shanghai, dropped 2.7% after increasing for ten consecutive weeks.

Container ships and container shipping costs matter to the chemical industry because, although most chemicals are liquids moved in tankers, container vessels carry polymers like polyethylene and polypropylene in pellet form. Titanium dioxide is also transported in containers.

Tanker Rates

US chemical tanker freight rates, as assessed by ICIS, were steady to lower this week, with downward pressure on several trade lanes. Rates on the US Gulf to Amsterdam-Rotterdam-Antwerp route face downward pressure as charterers remain in a wait-and-see mode. Aside from contract cargoes, very little activity is visible in the market. Tariffs and ongoing uncertainty continue to weigh on the spot market, pressuring rates.

The market has slowed significantly, with demand for additional product in the region nearly ceasing. However, a small number of caustic soda, styrene, and ethanol cargoes were quoted in the market.

Rates from the US Gulf to Asia and other trade lanes held mostly steady. The earlier uptick in activity, spurred by the recent ceasefire in the Middle East, appears to have stalled after hostilities escalated this week, and the market to Asia flattened. Consequently, this route remained quiet, putting downward pressure on freight rates.

Only a few cargoes have been fixed, as some additional outsiders have come on berth and are seeking to fill space, increasing competition for regular owners. Methanol and caustic soda are the most commonly reported cargoes in the market.

The US Gulf to Brazil trade lane remains unusually quiet, and rates are under downward pressure. While prompt space availability seems somewhat tight, there is ample open space for mid-July into August.

The US Gulf to India route saw no increase in enquiries over the past week, with no confirmed fixtures. Only a few new enquiries for monoethylene glycol were seen for August dates. Along with other regions, freight rates are widely considered softer.

Source: IndexBox Market Intelligence Platform