The impact of rising material prices and shipping prices on exports

1. The price of raw materials has skyrocketed

Since the power curtailment policy was strengthened in September, domestic production of ferronickel has fallen sharply. In October, the gap between power supply and demand in various regions was still large. Nickel companies adjusted their production plans according to power load indicators. It is expected that the output in October will show a downward trend.

According to the factory’s feedback, the immediate production cost of the ferronickel plant has increased significantly due to the recent surge in the price of auxiliary materials; and the impact of the power curtailment policy has led to a reduction in the production load of the factory, and the average cost has increased significantly compared with continuous production. Judging from the current market price, the immediate production of factories is on the verge of loss, and individual companies have already lost money. Eventually, the price of sheet metal rose again and again. Under the policy of dual control of energy consumption, the weak situation of market supply and demand continues, and ferronickel companies are once again facing a difficult dilemma. Under the self-regulation mechanism of the market, a new round of price conversion will also be triggered.

2. Sea freight rates continue to rise

In addition to being affected by environmental policies and raw material prices, changes in transportation costs also have a greater impact.

According to the Shanghai Export Container Freight Index (SCFI) published by the Shanghai Aviation Exchange, after 20 consecutive weeks of rising, the latest SCFI freight index fell for the first time. The freight forwarder said that although the freight rate has dropped on the surface slightly, the shipping companies still charge a General Rate Increase surcharge (GRI) in October. Therefore, the actual freight still needs to be added to the GRI surcharge to be the real freight rate.

The epidemic has disrupted the reciprocation of containers. Due to the good control of the epidemic situation in China, a large number of orders were transferred to China for production, resulting in export volume packaging, which intensified the shortage of space and empty containers. As a result, sea freight has continued to rise.

Post time: Oct-16-2021