Steel companies to face crisis of capital chain break due to port congestion
22 Sep 2021 16:39 reported by Ana Lee
The Port of Los Angeles and the Port of Long Beach are two major container ports on the West Coast of the US, which recently have gradually worsened in the port congestion.
Last Friday, the two ports announced that they would extend night and weekend business hours to increase port throughput and ease the situation of port congestion.
The iron and steel industry has also been affected. The industry pointed out the goods are unable to be shipped out, and there was no way to negotiate without the shipment. Therefore, many steel exporters are facing the risk of a capital chain break.
Some domestic industry players pointed out that due to port congestion, exporting steel companies become cashless, therefore unable to purchase raw materials, further causing raw materials importers to accumulate stock, which in turn reduce prices, creating a vicious circle.
The situation is happening in other countries. For example, the Indian hot-rolled coils, which have been occupied the Vietnamese market for a long time, have recently faded out. The main reason was that Indian steel mills were worried about the liquidity of local steel companies as some buyers have insufficient LC.
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