Engineering Thermoplastics (ETP) market participants are facing a period of uncertainty heading into the second quarter of 2021 as a myriad of separate issues have coalesced during February and March. The problems confronting global market participants are, in some cases, shared across all regions while other issues are more acute on a regional basis. Many aspects of the ETP markets are being affected including pricing, supply, and logistics, and there are concerns that demand might suffer in some areas.
The entire industry has been dealing with significantly higher transportation costs and freight rates since Q3 2020, and there are no signs of this situation improving over the next few months. International shipping came to a halt during the first major COVID-19 lockdowns in Q1-Q2 2020, causing extensive dislocation of not only ships but also container. Once lockdowns were eased and international commerce restarted, demand for goods of all kinds returned at much stronger levels than expected. The subsequent rush to secure shipping availability and containers led to massive increases in ocean freight rates and container costs which have carried over into Q1 2021. The cost of containers has increased five- or six-fold in the past year, and shipping space is extremely tight for virtually all routes.