The impact of sea freight on flake graphite

The export volume of flake graphite increased by 63.16% in July on a month-on-month basis, benefiting from higher demand in the European market, according to Xinhua information. However, since June, the sudden large demand has made the overall price of container transportation rise nearly 50% in four months, and the freight rate of individual routes has even doubled. What impact will the soaring sea freight have on the domestic export market of flake graphite?

Countries all over the world are vigorously promoting economic recovery, the market of container transportation is generally good, and the freight rate of ocean routes is rising

In the second half of the year, as countries around the world continue to face epidemic prevention and control, they have intensified efforts to promote economic recovery. China’s export container transportation market is generally good. When asked about the market situation of container transportation in July and August, many practitioners, including foreign trade enterprises, freight forwarders, and container transportation companies, mentioned one word at one time – explosion.

“For example, the actual shipping space is 300, but the shipping company will release 400. When the ship is allocated, some goods will not be loaded. They will either stay in the port for the next voyage, or they will be transferred to other ports for other voyages.” A freight forwarder explained: “in the past two months, the container transportation to the United States often exploded, and the volume of my (agent) cargo has more than doubled. We used to book one week in advance, but now we have to book two to three weeks in advance. ”

In short, there are too many goods to transport. According to the data released by Shanghai port and Ningbo port, the throughput of port containers has increased sharply since June.

The export pattern of domestic flake graphite determines that the sharp rise of sea freight has an obvious impact on the market

According to Xinsuo information statistics, the top five countries in terms of domestic flake graphite export volume from 2019 to July 2020 are Japan, India, South Korea, the United States, and Germany. The total amount of flake graphite exported to these countries from January to July 2020 is about 37400 tons, accounting for 60.46% of the total export volume.

In contrast, the recent surge in sea freight is mainly concentrated in South America, South Africa, South Korea, and Europe.

Exporters of flake graphite report that at present, most graphite exports adopt the form of CIF quotation to formulate contracts, that is, besides the cost of goods, the quotation of export enterprises also includes transportation expenses and insurance expenses, and the extra costs caused by high freight rates are borne by export enterprises, so the profit compression and cost increase brought by shipping expenses are obvious, In the later stage, foreign trade enterprises will adopt FOB or CIF to sign orders with customers. In the later stage, they will estimate the increase of sea freight and sign contracts cautiously.

According to Xinlun information, the export of domestic flake graphite to the United States, India, Germany, Japan, and India in July fell to different degrees from the previous year, with the decrease of 74.4% to the United States, 31.6% year-on-year decline to Japan, 52.1% year-on-year decline to India and 57.6% year-on-year decline in Germany.

The increase of scale graphite exported to Poland reached 936.5% year-on-year, while that of Turkey increased by 277% year-on-year, and that of Italy increased by 300% year-on-year.

Therefore, the growth of shipping cost will limit the recovery of scale graphite, and the export pattern of domestic flake graphite will change subtly.

Can high freight rates continue in the future?

After many people confirmed, at the same time, several major shipping companies also confirmed: in the face of the recent high freight of the United States line, relevant departments require the shipping companies to record their freight rates to further standardize the charging behavior; At the same time, improve the record of capacity, route, and shift. According to the leakage, some ship companies have made relevant solutions.

The above agent thinks that the third quarter is the traditional peak season of shipping, and the price rise is a common phenomenon“ The first half of the year was offseason, and the cheapest price to South America was hundreds of dollars. Now a high box freight rate has risen to $4000. However, it should be alleviated after October. ”

“In fact, the nature of the collapse and surge is that the supply-demand relationship has changed. Now, the excess capacity is serious, and the surge is only a temporary one.” A COSCO staff member said: when the current situation of excess capacity in the industry has not been fundamentally changed, there is no long-term basis for high freight rates.

Industry sources said that it may not grow anymore by the end of the month, and the shipping company is expected to cut rates after the 11th. The shipping company will take advantage of this period to maintain profitability in order to cope with the off-season after.

But there is still caution about the market. But how long the current high rates will last depends on the ability of shipping companies to digest sluggish demand around the golden week in China.

It can be seen that the soaring sea freight will have a short-term impact on the domestic scale graphite export market, but in the long run, the export pattern still depends on the global market demand pattern, while Europe, South Korea, and Japan will still be the main demand countries.