Freight rate drivers are weak ahead of the holiday period. The EC2604 contract is expected to experience volatile movement in the near term, with attention focused on the implementation of shipping companies' price hikes after the holiday in March. In typical years, April and October are the months with the lowest freight rates of the year. On January 8, 2026, the Ministry of Finance and the State Taxation Administration jointly announced the cancellation of value-added tax export rebates for products such as photovoltaics, which may disrupt the shipping schedules of related industries. This could further impact shipping companies' pricing strategies. Subsequent attention should be paid to whether Far East-Europe cargo volumes can significantly increase in February and March, and whether actual freight rates will be stronger than in typical years. Volatility in the EC2604 contract is expected to amplify, and investors should participate cautiously. In typical years, shipping companies issue price increase notices in March and April to try and stabilize prices. Some shipping companies have already issued price increase notices for March: MSC's March rate has risen to $1800/$3000; CMA's March rate has increased to $1750/$3100; HPL's rate for the first half of March has risen to $1835/$2935; and ONE's March quote has increased to $1620/$2535. Maersk's quote for the first week of March (March 2 - March 8) has been set, with the Rotterdam price remaining at $1900/FEU, and the price for basic UK ports increasing by $200 to $2100/FEU. Attention should be paid to the post-holiday trading rhythm. Shortly after Maersk's WEEK 11 price is announced after the holiday, it is expected that some shipping companies will post their April price increase notices by the end of February, leading to intense competition between current realities and expectations. The success of the March price increase remains uncertain. If the price hike is successful in early March, the valuation floor for the EC2604 contract may see some elevation. The EC2604 contract is expected to trade with volatility before the holiday, with focus on post-holiday cargo collection.

For more distant contracts, the timing of route resumptions is highly contested, and volatility is expected to remain elevated. The resumption of Suez Canal transit is expected to be a gradual process. COSCO management has indicated that there is still no clear timetable for a full resumption of Red Sea transit. The process from attempted restoration to full resumption could be a gradual one lasting 3-5 months. Resumption of Red Sea transit requires meeting multiple conditions: approval from industry association assessments, reduction of insurance premiums by insurers, customer acceptance of safety, and consensus within alliances. The current state of rerouting has become the new normal for customer supply chains, and COSCO is taking a cautious approach to returning to the Red Sea. Starting from mid-February 2026, Maersk's ME11 route will undergo structural adjustments to transition via the Red Sea and Suez Canal. Where possible, Maersk will also adjust its AE12 and AE15 services in subsequent phases to transit via the Red Sea and Suez Canal. Pressure from the delivery of ultra-large vessels in the first half of 2026 is relatively low, with only four vessels of 17,000+ TEU scheduled for delivery from January to June 2026. Subsequent attention should be paid to the actual timing of the Suez Canal's full reopening. If transit is not restored in the first half of the year, pressure on the supply side in H1 2026 is expected to remain relatively manageable, and higher freight rate levels may still be achievable. Investors could consider an arbitrage opportunity of going long the EC2606 contract and shorting the EC2610 contract. Contract month adjustments will be implemented starting Tuesday, February 10, 2026, with the addition of EC2605, EC2607, and EC2609 contracts. Historically, the annual peak for freight rates typically occurs in July or August. Between 2010 and 2025, August rates were lower than July rates in 9 out of 16 comparable data points. Between 2023 and 2025, August rates were lower than July rates in 2 out of 3 years. The market is subsequently expected to trade with July as the annual freight rate peak.

Risk Warning: Cargo volumes in March 2026 may fall short of expectations.