Shipping Prices Skyrocket again, Future LNG short supply

2021-07-08

From July 1st, the ocean freight, which is an important part of the profit disappearance, will skyrocket again! Since the beginning of this year, the price of China’s export container shipping capacity has risen sharply and continues to rise. Imports and exports are facing the test of price risk.

According to estimates by the American Retailers Association, the import volume of containers at US ports in a single month from May to September will maintain a level of more than 2 million TEU (20-foot containers), which will continue to rise from previous forecasts, mainly due to the gradual recovery of economic activities, but US retailers Inventory is still at a low point in the past 30 years, and strong demand for restocking will further boost demand for cargo. Jonathan Gold, vice president of supply chain and customs policy for the American Retailers Association, believes that retailers are entering the peak season for shipping holiday merchandise, which begins in August.

shipping

MSC will increase prices on all routes exported to the United States and Canada from July 1st. The increase is US$2,400 per 20-foot container, US$3,000 per 40-foot container, and US$3798 per 45-foot container, of which an increase of US$3798 per 45-foot container It also set a record for the highest single increase in shipping history!

As for the reason for the recent boom in the shipping market, industry insiders say it is the result of multiple factors. On the one hand, due to the global epidemic, import demand has been suppressed in the past year, and many businesses have the need to replenish inventory; on the other hand, affected by the home office policy, the demand for home shopping in overseas markets has increased. The traditional shipping season is coming soon. Almost all shipping companies have been gearing up and have successively launched price increase plans for major routes, but price reductions are still far away.

LNG is in short supply, and prices continue to rise

Affected by the easing of the global epidemic situation and the recovery of the global manufacturing industry, global raw material prices are showing an upward trend, and this is especially true for LNG. Because of the impact of the epidemic, the cost of extraction has risen, and the price of LNG market has started to rise since the end of 2020. In the same period of last year, there was a rise in varying degrees, and the upward trend has continued to this day. Because the market demand for products has increased and the supply is in short supply, the rising trend of LNG cannot be effectively alleviated in the short term. The time is about to come to the peak procurement season in the second half of the year. Various reasons have combined effects. The increase this year is higher than last year, and it is expected that by the end of 2021, LNG prices will once again hit a new high. And this momentum cannot be effectively controlled in the past two to three years.

LNG price

Therefore, shipments in 2021 should be as early as possible. The unabated ocean freight has not yet reached its peak, and the increase in ocean freight prices may become the norm. Hesitation will only increase more costs.