Everyone knows about the current global economic situation. There are banks and insurance companies closing every time we turn on the news, and the stock market is as unstable as an old Willy’s Jeep in 4 wheel drive.
However, if you are an importer, it is not the end of the world. As the Chinese say “every crisis makes for a good opportunity”. This is true with today’s market in China. Because of the lack of demand of raw materials many companies are creating larger stock piles than they have had in recent years. This means that the prices of these raw goods are coming down and the deals are only getting sweeter everyday in China.
One of the biggest surpluses that are happening in China is coal. Normally suppliers have 7-10 day supply on hand for orders. Do to the lessening demand for domestic electricity production and overseas purchases the stock piles are almost reaching a 30 day supply. This means that coal producers are running out of room to store coal and are willing to deal more than ever.
Another commodity that is stacking up around the world is scrap steel. Just a few months ago scrap steel was over $1000.00 USD per MT. Today it is a much different story. China has slowed its buying of scrap steel globally and it is starting to stack up at ports around the world that were regularly used for selling to Chinese buyers at record rates. Today the price of scrap steel has fallen to less than half of what it was going for just a few months ago.
These and many other raw goods are necessary components to almost all products made in China. When raw goods prices go down, so do the prices for the finished products. I have noticed some products in the last month go down 25% just so that the factory can keep the lights on and their staff employed.
If you have a good agent in China you can take advantage of this amazing opportunity. The prices are sure to go back up. Make sure that you get into China while the prices are still good. It will not be long until the competition reaches your country and the price of your products meets the demand level in your country.
