Global Freight Monitor: VLCC rates surge on tight supply

SCFI +0.7% w-o-w as congestion supports rates; EU weakens further, while Suez returns pose downside risks. VLCC rates surge on acute supply tightness; Dry bulk retreats on weaker larger vessels; Air cargo remains stable. Buy: Maersk, CX, PBS; Hold: SITC, CSET-H/A, DHL; Reduce: CSH-H/A, OOIL, Evergreen, HLAG. Container rates diverge: SCFI rose 0.7% w-o-w to 3,688, the highest since early July 2024. US rates gained 1-3%, while Europe fell another 4.7%, extending its decline to 11 consecutive weeks. Linerlytica noted freight and charter rates continued rising amid tight vessel availability, with monthly newbuild deliveries below 100k TEU. While congestion is easing in China and Europe, delays have shifted downstream to Southeast Asia and the Indian subcontinent, prolonging effective capacity constraints. We expect these bottlenecks to keep transpacific rates sticky through Golden Week. However, accelerating Suez returns, with Cape-diverted capacity falling to a two-year low of 4.6% of the