Irvine, California, March 4, 2024 – Raiven, a leading authority in electrical supply chain analysis, has released its highly anticipated outlook for the electrical supply chain in Q1 2024, titled "Q1: Planes, Trains, and…. Ships". This comprehensive analysis provides invaluable insights into the factors influencing raw materials and finished products pricing in the electrical industry.
Looking ahead to Q1 2024, Raiven identifies three volatile drivers – increased oceanic shipping costs, a "market ceiling" on OEM price increases, and Chinese deflation – which are expected to offset each other, resulting in a relatively flat pricing landscape. However, commodity spot purchases, such as wire and conduit, are projected to continue declining by 2-3% through March 2024.
Impact of Oceanic Shipping Rates: With container shipping rates soaring by 160% in December 2023, primarily due to disruptions in the Panama Canal and increased Houthi attacks in the Red Sea, Raiven forecasts a sustained rate increase in Q1 2024, potentially leading to a 1.1%-1.3% increase in product pricing.
OEM Driven Price Increases: Despite sustained price increases fueled by inflation in 2023, Raiven suggests an inflection point in OEM price hikes due to softening demand, with manufacturers focusing on cost reductions to protect margins amidst economic uncertainty.
Chinese Economic Challenges: China's economy faces a deflationary spiral attributed to declining population, a burst property bubble, and geopolitical tensions. This could lead to downward pressure on commodity prices, particularly copper, affecting electrical product pricing globally.
Other key highlights include electrification trends, market growth projections, and recommendations for Q1 2024.
Overall, Raiven's models indicate a relatively flat period for materials pricing in Q1 2024, with downward pressure on commodities and global demand likely resulting in marginal declines. The report underscores the importance of agility and strategic planning amidst evolving market conditions.
For more in depth analysis and recommendations for how to navigate the electrical supply chain in Q1 2024, download the full Q1 2024 Electrical Supply Chain Outlook.
About Raiven:
Raiven is the leading group purchasing program and procurement software platform for contractors and enterprises, enabling them to digitally transform their procurement process and obtain significant discounts on equipment, materials, and business essentials. Raiven's cloud-based procurement platform helps businesses purchase smarter and more efficiently through patent-pending AI algorithms that find in-stock products at the lowest prices. Learn more at http://www.raiven.com/and on LinkedIn.
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