FIS Air Freight Report June 8, 2020

China to Europe begins its slide in line with China to USA, as prices rout, down $1.52 on the week. China to USA now sits at $5.75, akin to price levels you might expect from a particularly high Q4 peak season rather than early June.

Shanghai and Hong Kong prices continue to slide across the board, whilst the spread into USA narrows down to 0.

Front Month prices follow on from negative current prices, the front-month slides 28 cents along China to Europe, with spreads narrowing reflective a more competitive market. China to USA replicates this, down 30 cents. Both lanes record substantial forward price declines up until August.

Market Comment 

Whilst prices continue to collapse, we look forward to future commodities other than PPE to support demand June onwards. Indeed, prices have dropped well before the proposed mid-June capacity boost, as airlines start to put aircraft back on-line for passenger duty.

The market will be out of the frying pan and into the fire, faced with political and economic uncertainty on fresh news of China-US tensions, global worsening (according to The WHO) of the COVID-19 pandemic, and widespread protests and riots in North America. A dampened version of these protests has spread over into Europe.

But onwards and upwards for FIS, please look forward to a new round of container freight reports in addition to the air freight updates. Also expect a redesign, focused more on increasing liquidity in the AFFA market.

Basket	USD/KG	CHANGE	CHANGE %	MTD	VOL %
CHINA - EUR	5.81	-1.53	-20.84%	6.58	90.88%
CHINA - USA	5.75	-1.37	-19.24%	6.44	87.59%
Blended	USD/KG	CHANGE	CHANGE %	MTD	VOL %
PVG/EUR	7.03	-1.62	-18.73%	7.84	113.87%
HKG/EUR	4.60	-1.43	-23.71%	5.32	77.78%
PVG/US	5.75	-1.82	-24.04%	6.66	112.70%
HKG/US	5.75	-0.91	-13.66%	6.21	93.87%
Global	USD/KG	CHANGE	CHANGE %	MTD	VOL %
Air Index	4.05	-0.78	-10.58%	2.27	49.63%

Forward Curve - Indicative Update

FIS AFFA, CHINA - EUROPE | USD/KG
	BID	ASK	MID	CHANGE
Jun-20	4.50	6.45	5.48	-0.28
Q2 20	4.50	6.45	5.48	-0.28
Jul-20	2.80	4.50	3.65	-0.50
Aug-20	2.40	4.40	3.40	-0.45
Q3 20	2.50	4.00	3.25	0.00
Cal-20	2.60	3.50	3.05	0.00
Cal-21	2.75	3.90	3.33	0.03

FIS AFFA, CHINA - USA | USD/KG
	BID	ASK	MID	CHANGE
Jun-20	5.00	6.50	5.75	-0.30
Q2 20	5.00	6.50	5.75	-0.30
Jul-20	2.90	4.00	3.45	-0.45
Aug-20	2.50	3.90	3.20	-0.75
Q3 20	2.30	3.90	3.10	0.00
Cal-20	3.05	3.40	3.23	0.00
Cal-21	2.80	4.05	3.43	0.00