As everyone in the cable industry might know, the C2 price has been showing an upward trend for about 1,5 years. This trend has continued during the first months of 2022. However, we see some stabilization but aren’t sure this will stay. The summertime is ahead but due to global market situation on crude oil and gas it would be a rough guess what the price of C2 will do. It is likely that it will increase within this or next month. This shows the price settings in the cable industry are hard to predict at the moment.
The C2 price has, of course, a direct impact on our polyolefin prices. These prices have been rising every month in the last 1,5 year as well. Partly due to the C2 feedstock developments but also other key factors on logistics and availability versus the increasing market demand have an effect on the development of the price settings.
We as HEC-Holland have a wide range of raw materials. We have different types of tapes, wires, yarns, FRP rods and so on. In 2021, the price of these materials increased the most, but this year they continued to increase every month. It is hard to predict how long this will continue to rise. Or will the stabilizing C2 price directly affect these materials?
In addition to the product price increase, the logistical/transport prices have also been rising for the last few years. Before COVID-19, at the beginning of 2020, the price for a 40 feet sea container from Shanghai to Rotterdam was about $2,000. At the peak, at the beginning of 2022, this price went over the $15,000. Hereafter, the prices went down a bit, and now it’s stabilizing for months. The sea freight price for a 40 feet container is now about $11,000.
In contrast to the stabilizing sea freight prices, road transport has increased a lot lately. The main reason is the war between Russia and Ukraine. This war resulted in high fuel prices and a shortage of available drivers. Lastly, the workload has also increased since international traffic is constantly increasing.
To conclude the price settings in the cable industry, the prices of our products and the transport prices are still rising, but there is some hope for improvement. But, no one can predict the future. We recommend that you contact your account manager to discuss what possibilities HEC-Holland is able to offer you, in order to secure your (future) production requirements. Furthermore, he or she is able to update you about the latest market developments and trends. This could be helpful to keep on track and think strategically ahead.