Sea freight: $1,000 more! Polyester: price increase, cancel discount

This year, due to geopolitical conflicts, both sea freight and upstream raw material prices have fluctuated greatly. Recently, there was news that the Houthis had attacked a U.S. aircraft carrier, and the geopolitical situation was once again tense, and freight and raw material prices were about to move.

Houthi armed forces: Again attack the US “Eisenhower” aircraft carrier

On the evening of June 1, local time, Yemeni Houthi armed spokesman Yahya Sarea delivered a speech, said the Houthis recently launched a series of military operations against a number of targets. In one of the operations, the Houthis launched missile and drone strikes on the USS Eisenhower, which is currently in the northern part of the Red Sea, the statement said. It was the second Houthi attack on a U.S. aircraft carrier in the past 24 hours. In addition, another operation targeted a U.S. destroyer. The remaining four operations targeted other vessels bound for Israel in violation of the Houthi navigation ban.

The U.S. military has not responded to the attacks.

Although the news has not been confirmed, may also be difficult to have empirical evidence in the short term, but freight rates and polyester prices do not care about these, found a reason, the first rise for respect.

Freight rate: another $1,000 increase

The early arrival of the peak season on European routes and the need to replenish inventory on American routes have combined to drive another broad-based increase in rates across the route.

The latest Shanghai Freight Index (SCFI) rose 12.63% to 3,044.77 points on May 31, rising for eight consecutive weeks and breaking through the 3,000 point mark, with the most significant gains on US and African routes. It is up nearly 57% in a month.

Specifically, rates on West routes rose nearly a thousand dollars, up 18.87 percent on a weekly basis, while rates on East routes rose 11.17 percent. Rates on Mediterranean routes and European routes also increased by 11.11 percent and 9.71 percent, respectively. Of particular note, West and East U.S. freight rates broke the $6,000 and $7,000 mark, respectively.

On other routes, fares from Shanghai to West Africa, South Africa and South America have also jumped by $799, $936 and $343 respectively.

SCFI specific quotation:
The freight rate from Shanghai to Europe was 3,740 USD /TEU, up 331 USD, or 9.71% weekly;
The freight rate from Shanghai to Mediterranean stood at $4,720 /TEU, up $472, or 11.11% weekly;
The freight rate from Shanghai to the west of the United States was $6,168 /FEU, up $979, or 18.87% weekly;
The freight rate from Shanghai to the eastern United States was $7,206 /FEU, up $724, or 11.17% weekly.

In addition, other routes:
The freight rate from Shanghai to South America (Santos) is $7,408 per 20-foot container, up $343;
The freight rate from Shanghai to West Africa (Lagos) is $6,151 per 20-foot container, up $799;
The freight rate from Shanghai to South Africa (Durban) is $4,824 per 20 feet container, up $936.

Polyester filament: price increase, cancellation of discount

In the middle and early May, polyester factories were under great inventory pressure and urgently needed to clear inventory, so they adopted the profit mode. However, after a wave of big promotion on May 20, the average production and sales of polyester on that day exceeded 300%, and some polyester factories sold nearly 10 days of inventory in one day, which eased the inventory pressure and smoothly transmitted the price of the industrial chain.
In just five days from May 22 to May 27, FDY 150D rose by 125 yuan/ton, POY 150D by 250 yuan/ton, and DTY 150D by 125 yuan/ton.
After that, there are still some polyester factories to raise the price of polyester filament. At the same time of rising polyester filament prices, some mainstream polyester factories have also reduced plant load and started production cuts, with the average capacity utilization rate of polyester factories at 86.35% as of May 30.
Market rumors, in order to repair cash flow, the polyester factory price attitude is very firm, completely cancel the preferential, the price will not let.

Weaving companies: increasing pressure

Weaving enterprises on the market at this stage are generally divided into two types, one is by differentiation, one is by walking volume. In terms of the number of looms, the latter is much larger than the former.

The weaving enterprises that rely on differentiation to survive need the accumulation of technology and talent all the year round, with higher profits, easy to receive orders, and also have the confidence to rise in price, so the price of polyester is only lower for them.

But to rely on high turnover, the amount of weaving enterprises, the profit margin has been limited compression at this stage, part of the time even because the machine is less than the machine is not turned on, because the market competition is fierce, the final grey cloth quotation is also difficult to rise, polyester silk price rise may break their balance, thus affecting the probability of opening.

The rise of sea freight is more likely to increase the account period of foreign trade companies again, causing greater cash flow pressure to textile enterprises.