Articles in Category: Logistics

The widely, if not universally, held belief that globalization is a win-win panacea for growth has never looked shakier.

While President Donald Trump has led the charge on calling out the failings of unfettered engagement with China and all that entails in terms of loss of manufacturing capability and sharing of hard-won technology, he is by no means alone.

The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2021 — including expected average prices, support and resistance levels.

Globalization and China

There is a growing groundswell of opinion that the long-held liberal beliefs that engagement would change China’s behavior have proved flawed.

China today is arguably more centrist, more actively and belligerently nationalistic and worryingly less influenced by world opinion than it has been for decades.

And yet it has, from an economic point of view, proved remarkably successful so far.

China’s economy has bounced back faster than those in the West. Furthermore, its economy has recovered faster than even its close Asian neighbors. That is because, in part, the party’s control meant it could enforce harsh — compared to in the U.S. or Europe — lockdown measures in the face of the pandemic. That enforcement extends to continued adherence to social distancing and hygiene standards since.

It is unlikely that a change of president in January, were that to happen following the November election, would have a meaningful impact on U.S.-China relations. A Biden presidency may try to foster a more collaborative international approach. However, the direction would likely be similar.

Europe, too, is following a less bellicose but similar path.

Europe’s investments in China and reliance on China as a trading partner are greater than that of the U.S., for whom China trade still represents a modest percentage of GDP.

Yet, even in Europe, there is increasing talk of decoupling supply chains and restrictions of technology transfers to China. Furthermore, these is talk of restricting Chinese technology companies’ access to the European market.

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Shipping

enanuchit/Adobe Stock

We have written in previous posts about volatility this year in the logistics market adding to buyers’ delivery and import cost uncertainty.

At other times, we have also written about the decoupling of U.S.-China trade or supply chains.

Events in recent months, however, suggest the two combined are likely to continue to create significant cost and uncertainty for buyers through the balance of this year — and likely well into 2021.

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The U.S.-China trade relationship and rising import costs

Firstly, the aforementioned decoupling is just not happening.

A fair part of the current pressure on shipping space and costs is coming from increases in trade between Asia and the U.S.

The pandemic has spurred demand for Chinese-made goods from electricals like laptops and associated electronics to PPE equipment, including masks and gloves.

China now accounts for more than 85% of all U.S. imports in the category dominated by N-95 respirators, disposable and non-disposable face masks, surgical drapes and surgical towels, according to Forbes. The U.S.’s imports of those products have surged to multiples of previous years’ demand.

From disaster to boon

Secondly, the normal run-up to the Christmas period is hitting a brick wall.

Shipping lines are removing sailings. Initially, the measure constituted a coping mechanism during spring lockdowns. However, since then, as the success in raising freight rates became apparent, the measure became a blatant move to improve profitability.

The pandemic has evolved rapidly from being a disaster for the major shipping lines to becoming a boon.

The disruption has caused considerable challenges, including:

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As a followup from a piece we posted last month about container logistics in the current pandemic environment, we thought an update may be appropriate.

In that vein, the dynamics at play in global supply chains remain highly volatile.

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Shipping

enanuchit/Adobe Stock

Shipping lines were thrown into chaos by coronavirus lockdowns — first in Asia, then Europe and finally in the U.S. Read more

enanuchit/Adobe Stock

The shipping industry’s woes started before the current pandemic.

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vit/Adobe Stock

Let’s take a look back at the week that was and some of the metals storylines here on MetalMiner:

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vit/Adobe Stock

An intriguing article by McKinsey headlines by asking what the future holds for the U.S. road haulage industry post-COVID-19 but in so doing goes on to illustrate an industry in long-term decline.

The collapse in industrial activity has hit the freight transportation and logistics industry hard these last few months, but freight’s problems have been on a slow burn for much longer.

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Before we head into the weekend, let’s take a look back at the week that was and some of the metals storylines here on MetalMiner:

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Photographee.eu/Adobe Stock/

This morning in metals news, German firm Thyssenkrupp announced the sale of its elevator segment, the U.S.’s trade deficit in goods dipped in January and the International Tin Association recently surveyed tin producers regarding the impact of the coronavirus outbreak.

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It probably had to happen at some stage.

As we wrote recently, it isn’t the coronavirus epidemic as much as the response to it that is causing a collapse in supply chains.

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The decision to shut down roads and quarantine cities across China has caused delays in workers returning to factories and those factories receiving raw materials.

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