Saxco Update - October 2024
ITC delivers countervailing verdict on Chinese glass bottles
Welcome to the October update from our friends at Saxco, on market dynamics in beverage packaging. This update first appeared in October’s Ciatti California Report, published October 10th, which you can read on Substack here.
The wine industry continues to reflect the geo-political uncertainty of the world. While Cabernet has been testing the mettle of growers and winemakers, with a heat spike to make things even more challenging, the themes of logistical efficiency, manufacturing constraint and growing demand also continue to the forefront.
Freight costs from Asia to the US have shown some relief, with a 4% decrease for the West Coast and a 3% dip for the East Coast, which could slightly reduce import expenses. Canadian rail operations remain stable for now, but potential disruptions loom as labor negotiations continue. Similarly, there is potential for a West Coast port strike. The US barely avoided a prolonged East Coast port strike commencing October 1st, 2024; the strike was suspended on October 3rd. If it had proceeded for longer, it would have created significant bottlenecks in supply chains, affecting shipments between Maine and Texas.
Trade and Duty Updates
In a major development, the US International Trade Commission (ITC) issued a negative final injury determination on September 20th, 2024, in the countervailing duty (CVD) investigation concerning glass wine bottles from China. This ruling means that no CVD duties will be imposed, and any preliminary cash deposits for these duties will eventually be refunded, though the process may take several months.
The parallel anti-dumping (AD) investigations for glass bottles from China, Mexico, and Chile are still underway, with final determinations expected by the end of the year. While we can’t predict the outcome, the ITC’s recent negative ruling in the CVD case may indicate a similar outcome for the AD investigations.
Port Strike: Although the East and Gulf Coast port strikes ended fairly quickly, it will take time to work through the backlog of cargo. It will likely take several weeks before cargo can begin to flow at a normal rate.
Manufacturing Constraints: Reduced furnace capacity among glass manufacturers could lead to higher prices or shortages.
AD Investigation Timeline: Key dates include December 16th, 2024, for the Commerce final determination and January 30th, 2025, for the ITC’s final ruling.
Bottled Tidbits - Glass is amazing! It’s infinitely recyclable, and just one recycled bottle saves enough energy to power your computer for 30 minutes. Even better, that bottle could be back on store shelves in as little as 30 days. In places with top-notch recycling systems, about 80% of collected glass is turned into new bottles and jars, cutting down the need for raw materials like sand, soda ash, and limestone. So, every time you recycle, you’re helping save energy and resources!