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South East Asia

Towards the end of 2023, there were hopes of a strong, stable market and a better economic climate for the global community, but these have been dampened by the ongoing conflicts in Ukraine and Gaza. The Red Sea crisis has added another layer of uncertainty because it concerns the safety and security of one of the world’s busiest and most important maritime trade routes.

Freight rates fluctuated considerably in the wake of COVID but had been steadily returning to pre-pandemic levels; however, developments in the Red Sea have once again disrupted the delicate balance of global trade, causing rates to surge once again and sending shock waves through the industry.

Unchanged interest rates in the USA have failed to offset the impact of disrupted supply chains, resulting in lingering challenges for industry. The South East Asian market has been compelled to make strategic adjustments in order to navigate the current economic landscape and maintain market share, such as implementing shifts in purchasing strategies to accommodate low supply conditions.

One positive has been the ongoing expansion of car manufacturing plants in Thailand. The recent establishment of the first overseas factory by Chinese EV maker Hozon New Energy Automobile is indicative of the rising interest in using Thailand as a manufacturing base. While bringing increasing investment and job opportunities to the country, the arrival of these manufacturers also boosts demand for raw materials, leading to a shift in sales markets from mainland China to Thailand.