BLOW TO CHRISTMAS CITY - MORE EXPENSIVE DECORATIONS IN THE USA-EUROPE -Filenews 5/5
Severe disruptions to shipping and high oil prices due to the war in Iran are driving up costs for Chinese Christmas decoration makers and potentially reducing demand in the United States, which is their best customer.
As CNBC writes, it is estimated that 87% of Christmas decorations sold in the US come from China.
Chinese manufacturers told CNBC that buyers will likely have to pay higher prices to buy Christmas decorations as the cost of plastic and other materials used has risen.
Lou Lipping's company, Kitty Christmas Factory, has been making artificial trees for the US and European markets for almost three decades. Its facilities are located in Yiyu City, known as the Christmas capital of China.
"Many customers are postponing orders," he told CNBC and attributed the phenomenon to the disruption of shipping in the Strait of Hormuz and high oil prices, which have increased the cost per tree by 10%. The basic material of its trees is PET plastic, which is derived from petroleum. The price of PET for artificial pine needles of Christmas trees has increased by 5%, and the cost of plastic used as packaging for shipments has increased by 15%, he said. Lu said her revenue has fallen by about 12% due to lost orders.
Yigu factories usually prepare in the spring to make sure their products are on store shelves for the Christmas season.
Chen Lian, which makes Christmas lights, said it fears further price increases as all suppliers speed up delivery schedules to cater to customers concerned about transport delays. "Everyone has to make deliveries between May and August, so demand is time-concentrated," he said. "Material prices are bound to rise," he added.
For this season, Lu said American buyers will likely have to pay at least 15% more. "The price of Christmas trees in the U.S. will definitely go up," he said. Probably in Europe as well.
