EqualOcean has learned that the demand in the shipping market from China to South America has surged suddenly after the May Day holiday.
Due to limited container space, some shipping companies have even notified customers that contracts signed earlier this year will need to be renegotiated, or else they will not be able to secure container space. This week, skyrocketing container orders have driven spot prices for 40-foot containers to over USD 10,000.
Currently, container space from China to South America is fully booked until the end of June. Even if customers are willing to pay higher prices, securing container space is challenging, and prices are expected to rise further next week. Industry insiders revealed that May and June are peak seasons for South American exports such as fruits to Asia, and while shipping from China to South America is usually stable, this May, Chinese customers urgently need to ship goods, partly due to low inventory levels of electronic products and increased demand in the Argentine market.
In recent years, trade between China and Latin America has been steadily increasing, with more shipping routes being established. Several Chinese cities have opened freight routes to Latin America. In 2021, Wuhan in Hubei Province launched the first mainland China-to-Latin America freight route, "Wuhan-Mexico City." In 2022, Chengdu opened the first Southwest-to-South America international freight routes, "Chengdu-Madrid-Sao Paulo" and "Chengdu-Sao Paulo," both served by all-cargo flights. In April 2023, Shenzhen launched its first South America freight route, the "Shenzhen-Sao Paulo" freight charter flight, followed by the "Shenzhen-Mexico City" freight route in December. Recently, Hefei Xinqiao International Airport opened the first direct freight route to Latin America, the "Hefei-Mexico City" route. The expansion of China-Latin America freight routes and the improvement in transportation efficiency provide logistics support for China-Latin America trade and promote industrial upgrading and regional economic integration in Latin America.
According to data from the Shanghai Shipping Exchange, the latest container freight index (SCFI) shows that the price of a 20-foot container on the Far East to South America route is USD 5461, while a 40-foot container is priced at USD 10922, marking a significant increase of 18.13% for the week.
Additionally, the Chinese National Bureau of Statistics announced on April 30 that the manufacturing purchasing managers' index (PMI) for April decreased by 0.4 to 50.4 compared to March but remained in the expansion zone for two consecutive months, exceeding market expectations of 50.3, indicating that Chinese exports have begun to rebound.