Posted on 12th November 2021 in the categories: Market Update

Market Update

Stacked containers at port causing congestion


The mixed market sentiment combined with escalating Brexit concerns take the wind of GBP/USD recovery from two-month lows of 1.3425.

Sarah Hewin, senior economist at Standard Chartered (LON:STAN), said that while the European Central Bank, Federal Reserve and the Bank of England had all been more dovish than anticipated, “the policy stance of the ECB and Fed had been clearly signalled and signposted. But for the BoE, the signals were very unclear and that’s why sterling took such a hit”, she moved on to say.

Hewin continued, “Sterling upside in the near-term is going to be limited as there is uncertainty being built into policymaking from the BoE.” Sterling is also feeling some pressure from the rhetoric around so-called Article 16, which allows Britain or the European Union to take unilateral action if they deem the deal governing post-Brexit trade is hurting their interests.

Britain has threatened to invoke Article 16 around Northern Ireland trade arrangements, and Ireland’s foreign minister said on Sunday the UK government appeared ready to do so.


November Commodity Table

In the month of October, Aluminium decreased by 0.12 (USD/KGS), Samarium has remained the same since March 2021 while other commodities seen an increase. Neodymium saw a significant increase of 25 (USD/KGS), Cobalt increased by 5.13 (USD/KGS) and Nickel 1.59 (USD/KGS). Copper had a small increase of 0.86 (USD/KGS), closely followed by Nickel with another small increase of 0.44 (USD/KGS).

October Oil Increase Table

Production & Freight Update

Congestion at ports such as Shanghai & Felixstowe continues, as 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, with delays upwards of 30 days still being reported.

Felixstowe remains severely congested due to the shortage of lorry drivers in the aftermath of Brexit. To alleviate the congestion caused by empty containers at this port, some shipping lines and hauliers have moved the containers to an off-port site, with reports of hundreds stacked 60-foot high.

Transatlantic airfreight capacity is due to increase with the reopening of the US borders this month, however globally, demand is expected to be very high due to the upcoming holiday periods.

Pressure remains as a result of the ongoing issues with sea freight, reduced capacity and pandemic-induced labour shortages, keeping costs high and lead times long.

Reduced production capacity and disrupted cargo operations continue as a result of increasing cases of COVID-19 and are further impacted by forced closures in relation to government imposed environmental restrictions.

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 and would urge you to review your requirements for 2022 and even in to 2023 at the earliest opportunity.

Whilst freight delays are unavoidable at this time, we are working with our customers by holding UK stock and would encourage that a minimum of 8-10mths of buffer stock is considered when re-ordering new production to help reduce the impact of freight delays and lessen the potential requirement for costly airfreight.

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