Sea freight soared! Commodities continue to rise! Chemical giants began to raise prices in June!

At present, the cargo index of global ocean routes has risen by nearly 80%. Hapag-Lloyd and CMA CGM have increased their comprehensive rates and surcharges. According to the analysis of freight forwarders, ocean freight can be steadily reduced as early as the second quarter of next year at the earliest. The European line has now ordered 12,000 US dollars per container. For now, it is an extravagant hope that the freight rate will drop!

It is understood that the price of a container from Ningbo to Los Angeles is now US$9,000, which only applies to arrivals at the port. In October last year, the non-consignment price of the PHX5, ONT9 and PHX7 warehouses in Los Angeles was five to six thousand US dollars, and the consignment price was only seven to eight thousand US dollars. Why have ocean freight prices increased so much? The main reason is still the shortage of containers and insufficient space.
Data shows that among the 21 ocean shipping routes in the world, the freight index of 16 ocean shipping routes has increased, while the freight index of only 5 ocean shipping routes has decreased. Among the major ports along the "Maritime Silk Road", the freight index of 12 ports increased. According to analysis by industry insiders, before September this year, it is difficult for container shipping prices to drop, and shipping space prices are already above the horizon.

Some colleagues also lamented, “This year’s shipping prices continue to hit new highs. Every day I ask the shipping company for a space. If I book a space, I don’t have a cabinet. With a cabinet, the driver can’t mention it at the terminal. When it comes to loading it back to the terminal, it’s impossible to get out. The half-month sailing schedule has been stretched to one month or even one and a half months, and every day is very exciting."
There is a shortage of gasoline in the U.S. and end delivery may be affected. What has caused a lot of noise these days is the hacking of a large U.S. fuel transportation pipeline operator. Affected by this, gasoline shortages and rising oil prices have occurred in gas stations in many states in the United States, and many consumers have begun to panic buying oil.
Because of the shortage, gasoline prices are also rising. According to the American Automobile Association (AAA), the national gasoline retail price reached $2.985 on the 11th, the highest level in the past six years.

Multiple factors are superimposed, and commodities continue to rise
Yesterday (18th), domestic commodity futures opened in early trading. Asphalt rose by more than 5%, iron ore and Shanghai zinc rose by more than 3%, Shanghai silver and crude oil rose by more than 2%, Shanghai lead and Shanghai tin rose by more than 1%. Apple, Soybean meal and coke rose slightly. Despite the outbreak of the epidemic in parts of Asia, the market's optimism about the rebound in fuel demand in the United States and other regions has increased, and international oil prices have risen. Brent crude oil futures stood at $70 per barrel on the 18th, the first time since March 15. The day before, New York crude oil futures rose 1.4%, hitting the highest level since April 2019, closing at $66.38 per barrel, the highest closing price in two years.

So far, the price of crude oil has risen by 34.7% this year, and it is also the commodity with the largest increase in commodity prices. Corn (33%) and copper (33.2%) are among the top three increasers. Industry insiders analyze that the high level of crude oil volatility is closely related to the Indian epidemic and geopolitical issues in the Middle East.

The epidemic in India is still spreading. The total number of confirmed cases of the new crown pneumonia in India has exceeded 24.96 million, with more than 274,000 deaths. Considering that India, as a country with a large population, the consequences will be disastrous if the epidemic goes out of control, so the market sentiment tends to be cautious recently. In the Middle East, the atmosphere between Palestine and Israel is tense. Israel has launched multiple rounds of air strikes, and Palestine also fired rockets to fight back. In addition, after the US refined oil pipeline was attacked by hackers, the pipeline was terminated. After the continued closure of ColonialPipeline, concerns about supply shortages have intensified.

The rise in crude oil prices has played a certain role in promoting bulk commodities. In addition, both developed and developing countries have adopted various degrees of fiscal easing to stimulate the economy in order to cope with the impact of the epidemic. Among them, developed countries have "released water" to a greater extent. According to IMF statistics, in the past year, countries have announced a total of 16 trillion US dollars in fiscal actions. Take the United States as an example. Since the outbreak of the epidemic in March 2020, the country’s Ministry of Finance’s economic stimulus plan has reached 5 trillion in total. US dollars, the country is currently brewing an infrastructure stimulus plan worth at least 2 trillion US dollars. The continuous implementation of the quantitative easing policy has led to flooding of liquidity, which has become an important factor driving the increase in commodity prices.

As one of the bulk commodities, chemical products have been gaining momentum recently. Not only have a variety of products hit new highs, but some leading companies have sent letters in advance announcing the price increase in June. It seems that they are confident that the market will continue to rise in June.

DuPont, Eastman and other chemical industry leaders led the gains
image
▶▶Venato: The global price of all titanium dioxide pigments used in coatings, plastics, inks and paper applications has risen. This increase will take effect from July 1, 2021.
EMEA (Europe, Middle East and Africa): 180 Euro/ton or 200 USD/ton (approximately RMB 1291/ton);
Asia Pacific/Latin America: US$200/ton (approximately RMB 1291/ton);
North America: US$0.08 per pound (approximately RMB 1138/ton).

▶▶DuPont: The Electronic Interconnection Technology Business Department under the Electronics and Industrial Division: Starting from June 15, 2021, or subject to the contract, the price of some products will be increased. Depending on the product, the price of some parts can rise up to 10%.
Based on the current market conditions, starting from June 1st, or subject to the conditions permitted by the contract, the prices of some products will be increased globally, and the price increase will be around US$300-550/ton (approximately RMB 1943). 3563 CNY/ton).

▶▶Eastman: Starting from June 1st, the price of glycol ether-related products will be increased if the contract permits, with a maximum increase of 5678 CNY/ton. The original notice is as follows:
Starting from June 1st, the price of Estrobond™ B products will be increased globally, with an increase of USD 0.30/kg (approximately RMB 1,936/ton) when the contract permits.

▶▶Trinseo: From June 1, 2021, the price of all styrene-acrylic and acrylic latex products sold to the North American carpet market will be increased, and the price increase will be US$222/ton (approximately 1426) under the conditions of the contract. Yuan / ton).
Although everyone is looking forward to the "turning point" and often guesses when the chemical market will "top and rebound", in fact, everyone is "knowledgeable" about the current market trend and future growth.
Titanium dioxide companies said that for 11 consecutive months of rising and hitting highs, in addition to the outbreak of downstream demand, the price increase of upstream titanium ore raw materials has also played a big role. At present, the upward trend has not stopped, and overseas chemical giants are planning to raise prices in the third quarter. It is expected that there will still be many price increase notices issued at the end of May.
Pigment companies said that since the beginning of the year, phthalocyanine blue and phthalocyanine green have increased by as much as 4,000-8,000 CNY/ton. A single negotiation, full line up, and cash payment are already "pediatrics". The leading iron oxide pigments have increased a lot since the beginning of the year. Secondly, it is expected that prices may still increase in June.
Curing agent products have been out of stock since March, and the price has risen from 35 yuan/kg to 105 yuan/kg, but the shortage has not been alleviated, and the order queue has intensified. From a conservative point of view, it is difficult to alleviate the shortage of curing agents before the end of August, which also means that there is still room for product price increases.
In addition, the coatings, chemical and other industries have stated that the epidemic has not been fully controlled and that the situation of short supply will continue. Factors such as shipping pressure and skyrocketing freight rates have also added fuel to the price increase in the chemical market.