Supply remained relatively stable through Q2. However, the Philippines was hit in May by its first larger typhoon of the season. Some mills were affected by flooding which caused disruptions to production at the mills for the week following due to power outages throughout the region. Many mills, already behind on shipments continue to play catch up and bookings are already extended out well into 4th quarter.
We are now a couple months into rainy season in the Philippines (May-November) but the effects of El-Nino throughout much of 2023 and through May 2024 are yet to be seen, as all indications point to smaller yields start of Q4 2024 and into 2025. As we move through Q3 and into Q4, La Nina is now of concern. As the weather transitions from warm, dryer weather into cooler, wetter weather it may also bring more intense storms in the region.
We continue to see prices increase from what we were seeing at the beginning of the year, and given forecasted projections, we will likely only see pricing increase further as we move towards Q4. Taking into consideration the increased likelihood of more intense storms over the next several months, we could see even more substantial price increases to follow and higher prices holding longer through 2025.
Transit has been a growing concern over the last number of months. Disruptions caused by vessel rerouting due to Geopolitical issues surrounding the Red Sea have been cause for return to longer transit times. Shipping lines reluctant to open more availability has only added to delayed shipments and large increases to shipping rates unseen since the supply disruptions seen during the pandemic.
There is also ongoing concern of union members strike at CN and CPKC which may cause further disruption to transit times over the next coming weeks.
Things to watch for in 2024 Q3:
Pricing continued to increase through Q2 and we expect to see further increase over the next few months, as the effects of El-Nino are realized. Intense storms are a very real possibility over the next number of months, which may further exacerbate a decreased supply for the end of the year moving through 2025.
Transit times seem to be stabilizing and rates softening as steamship lines begin to open more capacity but given the current climate around shipping disruptions over the last number of years nothing is off the table as far as what might happen going forward. We also will be affected by any supply chain disruptions that may occur in the case of rail workers strike.
Throughout all of this, we will continue do our utmost to supply our customers with the products they need. Know that we are working daily to secure your product in hopes that we can avoid delays to our valued customer base.