High inflation impact: US, European buyers look for cheaper goods

15.09.2022

US and European importers of merchandise like bags, apparel and jewellery are asking their Indian suppliers to ship cheaper products, as the purchasing power of inflation-battered consumers in those markets has declined.

Shoes and bags made of synthetic leather are increasingly replacing items of natural leather in export orders for Indian suppliers, as they are as much as 35% cheaper than the original. While buyers are seeking a cut in export prices for apparels, demand has increased for lab-grown diamonds, which cost less than half the natural ones.

A half-century-high inflation in the eurozone has led the European Central Bank to increase interest rates by three quarters of a percentage point last week from zero and warn about further rate hikes. Recessionary concerns are also high, weighing on consumer sentiment. The bloc's big four economies - Germany, France, Italy and Spain - have all had their growth forecasts for 2023 cut by the International Monetary Fund, with rising interest rates and uncertainties from the Russia-Ukraine war bein ..

German Port Congestion, Supply Bottlenecks Weigh on Global Trade

07.09.2022

Supply-chain snarls are persisting, with more than 2% of all global shipping capacity at a standstill outside Germany’s North Sea ports.

Congestion continued to climb in September at Bremerhaven and Hamburg, where there are now 19 container vessels waiting to unload, up from 17 two weeks ago, according to the latest Kiel Trade Indicator. About 11% of all shipped goods are stuck, the report said.

Germany’s outlook for trade deteriorated, with imports and exports slipping by 0.2% and 0.7% from the previous month, it said.

“Congestion is preventing a return to pre-pandemic levels,” said Vincent Stamer, head of the Kiel Trade Indicator. “High transportation costs are hindering a further recovery in global trade.”

In China, meanwhile, holdups outside some ports are easing as President Xi Jinping’s “Covid Zero” approach to combating the pandemic continues to shut down some of the world’s largest manufacturing hubs.

“In the Red Sea, the most important sea trade route between Europe and Asia, 16% fewer goods are currently being shipped than would be expected under normal circumstances,” according to the report.

Korean Air Weathered Pandemic Turbulence With Style

31.08.2022

Cargo has turned out to be the difference maker for airlines navigating the pandemic, says The Wall Street Journal. Just look at Korean Air.

South Korea’s flag carrier has prospered since taking an initial sharp hit in the early days of the global health crisis, and that’s largely because it expanded its substantial cargo business.

Many airlines turned to cargo as a savior as travel virtually shut down in 2020, but Korean Air was starting from a strong position as one of the world’s largest cargo-carrying passenger airlines and the owner of a big fleet of freighters.

Korean Air counted 42% more freight traffic in the second quarter compared with spring 2019, and cargo revenue was up 44% year over year. Airfreight rates now are pulling back, but the carrier is building up passenger business at the same time.

Europe’s Natural-Gas Crunch Sparks Global Battle for Tankers

24.08.2022

Europe’s energy crisis is unleashing a global battle over liquefied natural-gas (LNG) tankers. The Wall Street Journal reports that rates to charter the specialized ships are jumping to record highs and the competition is eating up shipping capacity while higher transport costs are helping push gas prices to record highs in Europe and Asia.

The tanker race is another sign of the reshuffling of the global energy map following Russia’s invasion of Ukraine. The war has intensified competition for tight energy supplies, reoriented commodity flows and fractured parts of the global oil-and-gas market.

One expert says just one LNG tanker is available for charter for a single voyage in Asia two months or more from now, and none is available in the Atlantic.

Traders are going on a buying spree, shelling out $24.1 billion on orders for new LNG tankers so far in 2022.

CHIPS and Science Act Will Strengthen Supply Chains, and Counter China, Biden Claims

17.08.2022

President Biden signed into law Aug. 9 the bipartisan CHIPS and Science Act of 2022, as part of an industrial strategy to revitalize domestic manufacturing, create good-paying American jobs, strengthen American supply chains, and accelerate the industries of the future.

The White House said the Act will strengthen American manufacturing, supply chains, and national security, and invest in research and development, science and technology, and the workforce of the future to keep the United States the leader in the industries of tomorrow, including nanotechnology, clean energy, quantum computing, and artificial intelligence.

Spurred by the passage of the Act, companies have announced nearly $50 billion in additional investments in American semiconductor manufacturing, bringing total business investment to nearly $150 billion since President Biden took office.

Micron is announcing a $40 billion investment in memory chip manufacturing, critical for computers and electronic devices, which will create up to 40,000 new jobs in construction and manufacturing. This investment alone will bring the U.S. market share of memory chip production from less than 2% to up to 10% over the next decade.