Monthly Report: What influence factors are intervening in the current global trading status

Table Of Content

After China National Holiday, all manufacturers are fully open for the last quarter of 2022.

There are 3 main factors that influence current international business:

The dropping Ocean freight charge

The relative experts in the logistics industry analyze that the disruption of supply chains caused the epidemic in the last year, and many countries experienced a “hoarding wave”, which resulted in the freight leaping crazily. It’s obviously unsustainable for economy to develop. In 2022, under global inflation, the demand of consumers declined relatively. Meanwhile, many new ships were put into service, which has broken the balance between demand and supply. For example, for the line of China – East Coast in US this year, the freight of 40GP in Jan was $10,000. In Aug, it was only $4000, which dropped above 60%. Comparing the highest price of $20,000 last year, the descending range was over 80%. Not only North America line, EU, South-East Asia, and Pacific lines, all shipping cost falls a lot since Aug.

The raw material, especially PVC still keep in the low position

Please check the SG5 PVC Cost table sheet below:

Our team noticed the fluctuation of crude oil for a long period. Generally speaking, the crude price is positively correlated with chemicals (PVC is one of these). But in the third quarter 2022, the crude price kept increasing, instead, PVC’s cost went down a lot. Because downstream supply chains do not need so much PVC as before, no matter the domestic or international demand. And we predict that PVC will keep declining in the coming fourth quarter.

The coming Christmas Season (from Nov 2022 to Jan 2023):

Timing to purchase products as inventory

With the approaching of the grandest festival Christmas day, people’s consumption will recover for celebration and shopping centers need to prepare promotional events for this busiest season. Considering the reasonable sea freight charge and low PVC cost, it’s a good period to place orders for China suppliers. If some importers are still in hesitation, we’re sorry that your order will be arranged quite later, cause the Spring Festival is early in 2023, just in January.

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