Global demand will continue to keep container rates up. At least until the Chinese Lunar New Year in 2022. Freight rates from India and Pakistan are also rising significantly due to a lack of containers and tight shipping schedules. In China, ferromolybdenum prices continue to rise due to flooding in the Zhengzhou region. And due to Russian export taxes on metal products from August 2021, hundreds of thousands of tons of aluminum may not be exported.
Global demand keeps container rates at elevated levels into 2022
The shortage of containers caused by the Corona pandemic and the significant increase in global demand will help keep freight rates at significantly elevated levels through at least Lunar New Year 2022 – if not beyond, according to ICIS. Even after that, container rates are expected to fall but could settle at levels around $5,000 per 20-foot container.
Freight rates in South Asia now also on the rise
While long haul freight rates from North Asia have been particularly affected by high freight costs, they are now also increasing in South Asia. India and Pakistan in particular are reporting a lack of equipment and a sharp rise in prices. Some reports from India indicate that rates have risen to $24,000 per FEU.
Ferromolybdenum in high demand in China, production limited by floods
China has seen significant declines in ferromolybdenum production due to various government measures and the flood disaster in the Zhengzhou region. Other alloy producers have also been affected. Supported by high demand on the part of steel producers and an already existing shortage, prices for Chinese ferromolybdenum are expected to remain high or even rise further.
Will Russian aluminum exports collapse by hundreds of thousands of tons from August?
The already tight international aluminum market could now face another challenge. According to corporate sources at the largest aluminum producer outside of China, Russia’s United Co. Rusal International PJSC, many exports would become uneconomical from August 2021 due to Russia’s 15% export taxes.
Rusal says it produces up to 3 million tons of aluminum annually. Hundreds of thousands of tons of aluminum products could be affected by the export cuts.
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