The Recent Impact of Chemicals to rise in Price a few Big Reasons

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1).Sea Freight

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Since the second half of last year, surging demand in the container market and a shortage of containers have dramatically pushed up freight rates and caused widespread congestion at major ports around the world. The container shipping market is moving towards a “new normal”, with high freight rates and a cyclical upturn in the market likely to last for several years. Shippers and logistics companies alike are likely to face tough times.

Shippers and logistics companies are facing a series of tough years, and a cyclical upturn until 2024 will help stabilize high rates, benefiting container shipping lines, said Lars Jensen, an analyst at Maritime analyst Vespucci Maritime.

In a webinar hosted by DSV Panalpina on Tuesday, Jensen assessed the rather chaotic container market. So far, 2021 has been a record year for container shipping and an expensive one for shippers.

He noted that the container market will be a “new normal” of high demand, lack of containers, high rates and congestion delays, mainly due to the combination of the Suez Canal blockage and the Novel Coronavirus pandemic.

Short of cabin, Short of container! Enterprise products backlog, delivery is difficult!

Freight a day price, crazy upward movement;

Willing to pay the money, may not be able to get the cabinet;

If the cabinet is guaranteed, the ship may not be able to leave on time;

Finally arrived at the destination port, but the port congestion can only continue to queue on the sea;

So many foreign trade companies sigh with emotion that this year is not to work for the boss, is to work for the shipping company.

Recently, many shipping companies have released their first-quarter financial results, and many of them have achieved the highest performance in history.

It is worth noting that in the current “high fever” shipping, shipping companies are brewing a new wave of price increases – the Pan Pacific Line ship owners are preparing to issue a large range of rates increase notice (GRI), effective June 1.

2).RMB Appreciation

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What foreign trade people still have a headache is not only the soaring sea freight, but also the loss caused by the continued appreciation of the RMB.After surviving the continuous decline of the US dollar exchange rate in 2020, there was no trend of rebound in the beginning of 2021. The US dollar exchange rate continued to go sideways and directly fell below 6.4, which was a big shock for many cross-border sellers. Every day, we struggle with whether to exchange foreign currency. When the budgeted profits meet the exchange rate, they will be cut down minute by minute. The RMB/USD exchange rate is expected to fall to around 6.30 in the first half of 2021, and is expected to remain at a higher level in 2021, and the RMB exchange rate is expected to remain stable in the long run.For foreign trade people, the profit is less, the pressure is greater.

3) The Market for Raw Materials is Soaring

Starting from February 2021, the price of steel, chemicals and other commodity raw materials has gone up wildly, greatly pushing up the production costs of exporters.

4) The Impact of High Freight, Raw Materials and RMB Appreciation on China’s chemical products market.

Under the pressure of high freight, raw materials and appreciation of RMB, the prices of almost all chemical products have risen sharply.

Soda Ash and Baking Soda/Sodium Bicarbonate are climbing to new heights and then planning price increases; Sodium Hydrosulfite is from February more than 700 dollars rose to the current 1200 dollars, the factory orders are full, stop quotation orders; Sodium Metabisulfite/Sodium Metabisulphite, Sodium Sulfite anhydrous affected by the sulfur and soda soda market, the price has also increased significantly;Calcium Chloride, especially Calcium Chloride 95% powder, has been rising so fast recently that producers are scrambling for raw materials. Barium Chloride and Barium Hydroxide have also increased by hundreds of dollars per ton.

To sum up, chemical products in the next few months, the overall trend must still rise.


Post time: May-14-2021