NOL

NOL/Container Shipping: Could see some positive interests after market leader Maersk Line said that it’s confident shipping lines will be able to further raise Asia-Europe rates next mth as they lay up vessels and reduce speed. Cite that the March increase wasn’t enough to cover cost. If the rate increase is successful next mth, believe that most Asia-Europe carriers would break even.

To cope with the rising fuel costs, container lines are also slowing vessels and adding larger, more fuel-efficient ships. The global fleet was traveling at an average 10.53 knots last mth vs 11.15 knots yoy. A 10% reduction in speed can cut fuel use by as much as 30%.

Separately, Shipping Consultants Drewry predicts transpacific trade will jump 14% this wk, suggesting shipping lines are having some success with their proposed increases. Add that although demand growth in the eastbound transpac remains muted, ship utilization has tightened following reductions in capacity during the slack season.

Technically, Chart appears to suggest further upside ahead, with RSI, ADX and Stochastics exhibiting further upside momentum, near term resistance could be at $1.515, which coincides with the recent highs and 38.2% Fibonacci Retracement.