The RMB Renminbi was a fixed rate with the USD until 2005, and while it held it’s own we have seen dramatic changes during 2017 from a high of 6.891 in June 2017 to 6.273 in February 2018.
The knock on affect is huge, as an example if a tin cost RMB5.50 to make the cost in US Dollars would be USD0.798 in June 2017 and now USD0.877 for the same tin, a difference of just under 10%.
If you imagine high retail items like Xbox’s, Iphones, washing machines etc this can have a massive affect to the retail price.
The RMB is under great pressure and the China Government might need to look at revaluing the currency again later this year if they are to sustain their exports expectations.
Tinworks donated 2 prizes to a charity quiz night for Lisa Wright who is running the London Marathon, this is her story below:
“On Friday 13th November 2009 I suffered a stroke and was unable to speak, swallow or move the right side of my body. It was terrifying. Thankfully I made a full recovery. Other people are not so lucky and The Stroke Association support these people and their families to regain independence and quality of life. They also research tirelessly to find an ultimate prevention and cure. I’m therefore running the 2017 London Marathon in support of this great charity and have organised my quiz night and raffle to raise much needed funds”
Freight hit a record low in October 2015, with 20ft container rates from USD175 and 40ft HQ at USD275 for the sea freight from China to a UK port. The UK internal freight to central UK from any major port is substancially more than the sea freight rates from China to the UK.
The rates in October were not sustainable and if this rate had continued for another 2-3 months it would have jeopardised some of the smaller shipping lines going out of business.
The interesting issue now is that a lot of super vessels Triple E class holding 18,000 TEU (20ft container spaces) were ordered in the peak freight boom of 2009-2010, these new vessels will be coming on stream in 2015-2017 and with the present price level it will be very difficult to cover the cost of these vessels.
No container ship wants to leave port empty so this leaves a lot of shipping lines in a quandary.
We have seen a down turn in China exports with the government trying to halt the decline by revaluing the RMB (China Currency) against the Dollar this coupled with super vessels coming on stream, it is going to be an interesting time over the next 2-3 years for the shipping lines. If I had shares I would be selling them.