The Rising Prices of Steel Shot, Steel Grit and Other Metallic Abrasives

In these days, the price for metallic abrasives such as steel shot and Steel Grit has raised, which is mainly driven by three interrelated factors: rising sea freight costs, the appreciation of the RMB, and increasing overall transportation expenses. These factors have jointly exerted pressure on the entire industrial chain, from production to sales, and ultimately led to higher prices of finished products.

The sharp rise in sea freight costs is a key catalyst for the price increase of Steel Abrasives.

Affected by the continuous escalation of geopolitical conflicts in the Middle East, major shipping routes such as the Red Sea and the Strait of Hormuz have been severely disrupted, forcing mainstream shipping companies to detour around the Cape of Good Hope. This detour has significantly lengthened the voyage, increased fuel consumption, and pushed up war risk premiums.

The appreciation of the RMB further impacts the price pressures.

The appreciation of the RMB has further exacerbated the price pressure on metallic abrasives-steel shot and steel grit, especially for export-oriented enterprises. As a major producer and exporter of metallic abrasives, China’s export enterprises are facing shrinking profit margins due to the strong RMB. For every 1% appreciation of the RMB, the profit margin of low-value-added industries such as metallic abrasives may be compressed by 3% to 12%. In addition, the appreciation of the RMB has raised the US dollar quotation of export products, weakening their international price competitiveness, and enterprises have to adjust product prices to maintain their profit space, which has further driven up the overall market prices of steel shot and steel grit.

Increasing transportation costs add to price burdens.

In addition to sea freight, the overall transportation costs have also increased significantly, adding to the price burden of metallic abrasives. The rise in international crude oil prices has led to higher fuel costs for land and inland waterway transportation, while port congestion caused by disrupted shipping routes has increased temporary storage and transshipment costs.

Impact on downstream industries.

As an important supporting material for industries such as construction, shipbuilding and automotive manufacturing, the price rise of steel abrasives has also had a certain impact on downstream