Posted on 15th October 2021 in the categories: Market Update

Market Update

October Market Update

Currency

Movement this morning has been driven by the US dollar, strengthening 60 pips against both the Euro and Sterling. Oil and Gas prices are having a continued effect on the reserve currency. Moreover, the ADP data release this afternoon showed optimism in the US labour market, posting a better-than-expected figure. This release is typically used as an indicator to the all-important non-farm payroll release on Friday. Like the ADP release, the non-farm payroll release expecting to post growth on the previous month. Data releases from the EU this morning failed to limit the US dollar strength as German factory orders declined more than expected and EU retail sales showed growth for the first time since August however fell short of expectations.

GBP/EUR – mid-1.17’s  – 70 pips away from the high of the year.

GBP/USD – high 1.35’s – Reversing gains made over the last 4 days.

Production & Freight Update

Congestion at ports such as Shanghai & Felixstowe is growing, with many containerships waiting to anchor. The pre-Christmas peak, combined with haulage shortages, congested inland terminals, poor vessel schedule reliability and the pandemic, has resulted in a build-up of containers at the ports.

Containership capacity equivalent to 12.5% of the global fleet is now unavailable due to delays caused by port congestion & carrier reliability has worsened, with delays upwards of 30 days being reported.

Felixstowe has become severely congested with the average ‘dwell times’ for cargo at the port nearly doubling in the last two weeks. With the ‘dwell times’ going from 5 to 9.7 days. The shortage of lorry drivers means that more containers are arriving than are being collected. Therefore, creating a backlog, and some of the larger shipping lines are diverting their vessels away from the UK to European ports, and then moving the containers to the UK via Dover.

Aircraft capacity remains depressed as passenger air services continue to be constrained due to restrictions on international travel. More pressure is being added due to the ongoing issues with sea freight and the backlogs caused by the China holidays at the start of the month. Lead times are longer than usual due to ongoing challenges with reduced capacity and pandemic-induced labour shortages.

Due to increasing cases of the contagious Delta variant of COVID-19, countries have been forced to impose new lockdowns. Stricter quarantine measures have also been introduced. China has continued to experience a surge of cases, which has resulted in reduced production capacity & disrupted cargo operations at both airports and seaports. Increased congestion and vessel delays has resulted as local authorities implement quarantine measures. This is in an attempt to try to contain cases and prevent the further spread.

Goudsmit UK

In response, Goudsmit UK are continuing to advise all customers at the point of quotation and order confirmation of the extended lead times so that they can be factored in when planning. We would request that you review your current requirements and advise of any issues asap. Furthermore, we would urge you to review your requirements for 2022 at the earliest opportunity.

Whilst freight delays are unavoidable at this time, we work with our customers by holding UK stock. 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.

Share this post:


Sign up to the newsletter

Get latest news, offers, products and more, sent straight to your inbox

By signing up for our newsletter, you are agreeing to our privacy policy, terms and conditions