The cost of sending 20-foot containers from Asia to the US West Coast has
jumped about 132% from February to $2,200/container and severely curtained PET
imports, several sources said Wednesday.
"At Chinese New Year I paid $950 (per container) but now I'm at $2,200.
It's crazy," a supplier said.
In addition to the higher container price, ship owners added a $14/mt
peak season surcharge.
Due to the severe jump in cost of sending PET from China and SE Asia to
the US, importers found it increasingly difficult to make deals, traders
said. For every $400 increase in container prices, the cost of shipping would
go up 1 cent/lb of PET, a trader said.
"My customers complain that the FOB price is too high, but the issue is
the freight costs," a trader said.
The trader's landed price in California was at 64 cents/lb to the port
for July delivery, but June domestic prices were at 63-64 cents/lb delivered.
If container price hikes had been more moderate and there was no surcharge,
the price would be under domestic market, and a converter would have been more
amenable to making a deal.
"They (shippers) took containers and vessels off the market when the
recession started and just kept on raising prices," the trader added as an
explanation for the higher costs.
Another exporter from SE Asia commented that he's facing up to 1 month
delays due to a lack of vessel space to get PET to California.
"It's not just the cost, they aren't even taking new bookings," the
source said.
Sources worried that the worst was not over and higher costs could be
coming soon.
"We hear there's another $350 coming in July and another surcharge after
that," an importer said.
The higher logistic costs have been a boon to domestic demand. As such,
PET producers were looking to gain margin and sales volume from the lack of
imports. June PET costs were down 5 cents/lb but suppliers were working on
only giving 2 cents/lb of that back to converters with the rest as a margin
expansion, partly enabled by the reduction in import competition.
jumped about 132% from February to $2,200/container and severely curtained PET
imports, several sources said Wednesday.
"At Chinese New Year I paid $950 (per container) but now I'm at $2,200.
It's crazy," a supplier said.
In addition to the higher container price, ship owners added a $14/mt
peak season surcharge.
Due to the severe jump in cost of sending PET from China and SE Asia to
the US, importers found it increasingly difficult to make deals, traders
said. For every $400 increase in container prices, the cost of shipping would
go up 1 cent/lb of PET, a trader said.
"My customers complain that the FOB price is too high, but the issue is
the freight costs," a trader said.
The trader's landed price in California was at 64 cents/lb to the port
for July delivery, but June domestic prices were at 63-64 cents/lb delivered.
If container price hikes had been more moderate and there was no surcharge,
the price would be under domestic market, and a converter would have been more
amenable to making a deal.
"They (shippers) took containers and vessels off the market when the
recession started and just kept on raising prices," the trader added as an
explanation for the higher costs.
Another exporter from SE Asia commented that he's facing up to 1 month
delays due to a lack of vessel space to get PET to California.
"It's not just the cost, they aren't even taking new bookings," the
source said.
Sources worried that the worst was not over and higher costs could be
coming soon.
"We hear there's another $350 coming in July and another surcharge after
that," an importer said.
The higher logistic costs have been a boon to domestic demand. As such,
PET producers were looking to gain margin and sales volume from the lack of
imports. June PET costs were down 5 cents/lb but suppliers were working on
only giving 2 cents/lb of that back to converters with the rest as a margin
expansion, partly enabled by the reduction in import competition.
