Dalian seafood whole lockdown!
In the early of November, Dalian, a city in the north of China hit delta covid 19 cases again. In this situation, the confirmed case is from one of the workers in frozen storage. Then about 10 cases confirmed who are related to this cold storage. Usually, a confirmed case of Covid 19 will not affect that hard on the frozen seafood section. Unfortunately, this outbreak occurs in the frozen storage, and the key point-it is in Zhuanghe, Dalian.
Why Zhuanghe Dalian is that important?
So where is Zhuanghe, Dalian? Why it is that important to the Seafood market. Dalian handles over 40% of the Chinese Frozen Seafood, and its main products are Alaska pollock, cod, hake, salmon – they import the raw material and reprocess it into different specifications. These products have a great sharing of the global seafood market. We all know the Alaska pollock story of Dalian, you can check our preview article for further reading- Alaska pollock situation. And Zhuanghe is the core area for Alaska pollock, cod, hake, and salmon reprocessing.
All the factories closed, offer from other areas have a price gap difference.
After the outbreak, the whole frozen seafood industry in Dalian is closed, Dalian seafood whole lockdown. All the cold storage, reprocessing factory and seafood companies are closed and there are no offers of APO, cod, hake, and salmon from Dalian. That’s bad news for the importers in the EU and the USA. Ocean Treasure sourced some suppliers in other areas, but the price is at a very high level. Some of the products can have one dollar difference compared with preview offers from Dalian.
There might be S10,000 more cost of each container
This whole lockdown in the seafood section still continues and wait for the approval to restart. During this lockdown, the cost for storing the raw material, the cost of the labor, and the transportation cost will increase accordingly. Otherwise, some of the raw material containers are still in customs and waiting for clearance. According to the new regulation, these containers will stay at the customs and wait for further acid tests and the clearance will delay. Many factories say for a short term like two to three weeks is fine, but for over one month, that will be a problem since they have to pay a high expense on demurrage fees and container postponement fees. (This happened before and some containers cost over $10,000 more for the final fee)
The ready container is difficult to send out
For some pending orders, even the factories that finished loading the container, many entrances of the highway have strict control of the frozen seafood transportation, so they can’t send the container out. Also, the north of China is hit with extreme weather and many roads are blocked.
Freight is finally stable and starts to decrease
So there is no good news? No, there is one about freight costs.
Asia-US West Coast prices fell 26% to $13,924/FEU. This rate is 261% higher than the same time last year.
Asia-US East Coast prices decreased 20% to $15,865/FEU. This is 239% higher than the rate for this week last year.
It seems recently the power control in China and the easing of the peak season demand have led to the largest price drop of the past two years. With this case of the Dalian outbreak, let’s see what the freight price will be next week.
In all, the Dalian seafood section lockdown will last for a while, and Ocean Treasure, as a reliable seafood supplier in Asia, is ready to offer you other options. We always look forward to the solution.