Freight rates soared and the United States faced record metal prices

According to the news on February 8, the prices of raw materials required for refrigerators, cars, window frames and pipes are rising, and the U.S. supply chain crisis continues for another year. The prices of these raw materials show no signs of falling.

John Gillespie, senior Essex's commodities manager, saw that the problem continued to spread across the country. Transportation and logistics costs of copper and aluminum increased the most among all costs.

The chaos caused by the continuing epidemic is pushing up the cost of trucks and railcars transporting goods, resulting in delays in the transportation of raw materials. Product manufacturers are paying record prices for copper and aluminum, two key metals used in everything from wires to electronics to cars. According to the data since 2003, the transportation benchmark price of copper in the United States is at the highest level, while the transportation cost of aluminum currently accounts for 20% of the total price of the metal.

For most of 2021, supply chain issues made headlines, and commodity prices soared to the highest level in more than 10 years. Demand rebounded after the epidemic blockade, but supply was limited. The move triggered global inflation and forced governments to take action, and many hope that efforts to ease inflation barriers will stabilize the market this year.

When buyers ship copper to the Midwest, they usually pay a higher price than Comex.

Aluminum's situation is even more severe, with delivery prices in the Midwest soaring by more than 40 per cent over the London Metal Exchange (LME) premium over the past two months. For buyers, this means paying an additional $768 based on the raw material price of about $3100 per ton.

Towards the end of the year, industrial metal prices fell, but rose again since the end of December last year, as energy prices, geopolitical concerns and Omicron mutants put more pressure on the broken supply chain.

Traders said that copper and aluminum can be bought as long as you need them, but the location of these metals is not suitable for transportation by trucks and railway vehicles. Efforts by Canada and the United States to encourage truck drivers to get vaccinated have made things more difficult, with obstacles to aluminum transport reported at key border crossings. Canada is the largest supplier of aluminum to the United States, accounting for about 50% of U.S. aluminum consumption.

To be sure, not everyone believes that high freight rates will last longer. In fact, according to harbor intelligence, a research institution, it may start cooling in the second quarter of this year.

Jorge Vazquez, managing director of harbor, said: "we believe that prices will decline sharply from the second quarter because we see logistics obstacles gradually dissipate."

Harbor said demand would also fall as the Fed began to tighten monetary policy and raise interest rates.

For Jay Richman, the boss of E.W. Berger & Bros., New Jersey, the sooner the logistics dilemma ends, the better. The company is a family run wholesaler whose products range from copper pipes and accessories to water heaters and faucets. Richman said he had to wait three months to receive the order. A year ago, the waiting time was about six weeks. Before the outbreak, it was about two to three weeks.

"They set me a quota -- if I want to buy 500 pieces of copper, they will tell me and give me 50 pieces. When I get the goods, maybe 10 pieces. Richman said he buys products from domestic manufacturers and sells products to companies like Amtrak. "Now everyone wants to return to normal and everyone is ready. I have a lot of business, but I just don't have materials. If I have these materials, it may be my best years, but I don't have them."