The Pound has strengthened off the back of some positive comments on the Bank of England’s monetary policy outlook made by MPC member Gertjan Vlieghe, who was speaking at The University of Bath. He revealed The Bank of England is most likely to begin raising interest rates “well into” next year. Although a move could come earlier in 2022 if the economy rebounds faster than expected.
Vlieghe said the very rapid growth and pick-up in inflation due this year as the economy recovers from the Covid-19 pandemic would not last. However, modest tightening of monetary policy was likely to be needed to tamp down inflation over the medium term.
May seen a shift across all commodities aside from Samarium, which remained the same. Neodymium seen a significant decrease of 11 (USD/KGS) while Aluminium had a much smaller decrease of 0.04 (USD/KGS). Cobalt had the biggest increase in May of 1.49 (USD/KGS). Copper sits at an increase of 0.3 (USD/KGS), followed by Nickel which increased by 0.28 (USD/KGS). Zinc had an increase of 0.14 (USD/KGS).
Any hopes of the global freight issues rectifying quarter 2 have been dashed as the operational challenges continue. Container lines continue to omit large numbers of port calls and blanking sailings, as they struggle with port congestion, equipment imbalances and lack of capacity. The issues seem nowhere nearer to getting resolved, and if anything, appear to be getting worse.
Unfortunately, blank sailings not only reduce the number of containers available. They also disproportionately affect lower-paying shippers, with carriers favouring cargo from higher-paying customers. As a result, higher shipping costs have continued throughout May, but remain high in response to the shortages of services and availability.
Aircraft capacity remains depressed as passenger air services continue to be constrained due to restrictions on international travel. Rates weakened slightly at the end of May but remain high in response to the shortages of services and availability.
The UK is in the process of negotiating trade agreements with individual countries, with Norway being the latest to be signed of. The Northern Ireland Protocol has been a feature in many headlines and has been branded as unsustainable, with the UK and EU linked in heated debate to try simplifying the process. The current arrangement has been very disruptive for trade between GB and NI with additional documentary requirements, checks and physical inspections on goods arriving into NI from GB. The European Commission had hoped that the months of technical talks on the contention around the Protocol would have resulted in a unilaterally agreed road map for the way ahead. However, negotiations have made very little progress.
At Goudsmit UK, we use several different freight partners to transport our customers products globally. This multi-carrier approach allows us to select the carrier best suited to your requirements, providing flexibility and a tailored service. Whilst freight delays are unavoidable at this time, we work with our customers by holding UK stock. Additionally, we would encourage that 6-8mths of buffer stock is considered when re-ordering new production. This helps to reduce the impact of potential freight delays and lessening the potential requirement of costly airfreight.
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