As the tension in the Red Sea continues to escalate, several major shipping companies have successively stopped Red Sea routes. Container ships have had to detour around the southern tip of Africa, the Cape of Good Hope, adding thousands of kilometers to their journey. This route adjustment has increased freight costs from Asia to Europe.

Comparison between the Red Sea route and the Cape of Good Hope route

Against the backdrop of the increasingly complex situation in the Red Sea, the global containerized freight indices for major shipping routes have all shown varying degrees of increase, with the Mediterranean and Europe experiencing the largest surge of nearly 100%, reaching a new high in nearly a year.

Changes in China-Global Export Containerized Freight Indices

On January 15, Shanghai Shipping Exchange unveiled that the latest Shanghai Export Containerized Freight Index (SCFIS) tracking the European route settled at 3140.70, a significant 49.7% increase from the previous period, while the one tracking the US West Coast route was 1673.68, marking a 41% increase from the previous period.

Europe and the U.S. have always been important destinations for China’s MDI exports. From January to November 2023, China exported 181,000 tonnes of PMDI to Europe and 429,000 tonnes to the U.S., accounting for 18.3% and 25% of the total export volume, totaling over 43%. When considering Red Sea coastal African countries such as Morocco, Algeria, Libya, Egypt, Sudan, which are equally affected, nearly half of PMDI exports may be impacted by freight costs.

However, MDI prices in Europe have not shown a significant increase yet, according to the latest data tracked by PUdaily.

We will continue to monitor the changes in China’s and global polyurethane prices and export volumes resulting from the evolving situation in the Red Sea. Please stay tuned for further updates!