Banking major HSBC has brought forward its trough scenario for container shipping given the extreme speed with which the sector’s fortunes have declined in recent months.
At the current pace where spot rates are plummeting by 7.5% every week, freight rates may hit 2019 levels by the end of this year, HSBC is now forecasting, a level where the bank expects capacity discipline to meaningfully emerge, especially when rates go below cash costs.
HSBC has brought forward its trough scenario to mid-2023 from 2024, predicting the Shanghai Containerized Freight Index (SCFI) will hit its nadir in the middle of next year, while sector profitability will bottom in the second half of next year.
