High Freight Rates Lead Sodium Gluconate Prices to rise in China Despite Low Consumption

In June, the price of Sodium Gluconate increased by approximately 3.4% in the Chinese market, despite low demand from the downstream construction sector. This Sodium Gluconate price surge can be attributed to a rapid increase in freight rates across the Asian region, which significantly impacted the supply chain and raw material costs, creating hindrances in the import and export of Sodium Gluconate. Freight costs skyrocketed by more than 40% during June alone, while the global container index surged by approximately 70% this month, further influencing the Sodium Gluconate price trend.

Since May, the global freight industry has experienced a significant surge in rates, driven by a notable shift in market dynamics. This surge has been characterized by a scarcity of capacity and rapidly increasing freight rates, reminiscent of the pandemic era. The supply-demand imbalance has been exacerbated by congestion at major Asian ports, including Singapore, Tanjung Pelepas, Port Klang, Shanghai, and Ningbo.

Shippers in China have faced growing equipment shortages due to high export demand and disruptions to long-haul and intra-Asia services caused by ongoing vessel diversions around southern Africa. These equipment shortages have become severe in most of Asia's main loading ports. Shipping liners are repositioning empty containers in an attempt to improve the situation. However, with continued vessel delays caused by rerouting via the Cape of Good Hope, these issues are expected to persist in the coming weeks, which may keep on affecting the supply situation of Sodium Gluconate.

While port congestion in Asia is beginning to ease, shippers still face an additional 2-3 days in berthing lead time. Demand remains stronger than usual, and freight rates have risen again in the first half of July.

Moreover, the demand for Sodium Gluconate from the downstream construction industry was sluggish. According to data from the National Bureau of Statistics, national investment in real estate development from January to May totalled 4,570.1 billion RMB, marking a year-on-year decrease of 7.2%. Investment in residential properties during the same period amounted to 3,480.9 billion RMB, reflecting a decrease of 6.4%. The sales area of commercial housing from January to May was recorded at 464.4 million square meters, showing a year-on-year decrease of 0.9%. However, the sales area for residential properties increased by 2.3%. In terms of sales value, commercial housing sales reached 4,978.7 billion RMB, an increase of 8.4%, with residential property sales rising by 11.9%. The overall sluggish performance of the real estate industry has limited support for the Sodium Gluconate market.

According to ChemAnalyst, due to recent rainy weather, the inventory of Sodium Gluconate enterprises has further increased, and short-term demand is difficult to significantly increase. Therefore, ChemAnalyst believes that in the short term, the Sodium Gluconate market may experience a slight decline in the first half of July 2024.