Weak Dollar, Price of PVC & Freight Surcharges Push Cost of Chinese Flooring Imports to All-Time High
Chattanooga, TN, December 10, 2020-The cost of importing LVT from China, where the bulk of product is manufactured, has reached an all-time high.
The reasons for the increased cost to import LVT are three-fold: the weak dollar versus the yuan, the fact that PVC chip is at record levels price-wise, and increased surcharges on freight containers due to limited availability.
The dollar’s value relative to the yuan has declined 9.7% to 6.5 from its May high of 7.2.
In addition, the cost of PVC chip-a necessity for all vinyl plank flooring brands that produce products domestically-has increased 29% in three-month’s time to $8,512.50/ton.
The freight container price rise is due to increased demand for imports leading up to the holidays as well as “post-lockdown restocking, limited air-freight capacity, incremental demand for stay-home goods and PPE (personal protective equipment),” reports Reuters.
“Shipping rates have surged over the past month because of an acute shortage of containers and shipping space,” reports YiCai Global, “so exporters have to sit back and wait their turn despite explosive export demand, Lou Lei, general manager of Yiwu Tianpeng International Freight Forwarding, told Yicai Global.
“‘One container can accommodate CNY50,000 to CNY60,000 (USD7,620 to USD9,410) worth of products, but the freight [rate] for one container has risen 30 percent to tens of thousands of yuan,’ said Lou, whose company serves Yiwu in China’s Zhejiang province, the world’s largest “Shipping companies have even resorted to a lottery system to determine whose goods to move, according to a staffer with a major Shanghai-based freight forwarder.”