Adaptability in stormy times
The price increase that is affecting our raw material, affects also the supply of the manufactured product.
Manufacturing companies have begun to move through different Unions, looking for explanations, but, first of all, looking for solutions.
The reactivation of Asia and the lack of response from the institutions that represent the sector, have generated a speculative collapse that affects everyone.
One of Metalmalla’s fundamental values is ADAPTABILITY. We adapt to difficult situations, we anticipate problems with effective solutions, reinforcing planning, checking stock more often, etc …
One of the causes of this problem, as well as the price increase, is found in the price policy of the European Union.
These policies have been imposing barriers on steel from countries such as China, Taiwan, Turkey or Russia since 2016, on suspicion of unfair practices and due to pressure from continental steel companies.
We are also affected, as in all sectors, by COVID-19, which reduced production and affected many companies, even with ERTE processes.
And we have to add the reactivation of economic and industrial activity, which produced an unexpected peak in demand.
This is how Confemetal explains it:
“The high demand from China for certain raw materials, once its economy has reactivated, is identified as the main cause that we are in a situation of increasing prices and low availability. This situation was detected at the end of last year, and companies that didn’t anticipated this, and didn’t adopt defense positions, are having difficulties in supplying material. China is the world’s main producer of these raw materials and components, and absorbs it for its domestic market”.
The concern is especially focused on the accumulation trend, taking advantage of current prices before further increases. This puts some of the supplies at risk, as well as contributing to increasing the prices.
This imbalance has made SMEs plan their purchases in advance, in order to guarantee supply to their customers.
For those companies that choose to import raw materials, there has been a significant increase in prices in maritime shipping. From China, for example, these values have tripled, and delivery times have doubled.
Metalmalla works hard to reduce this impact on an economic level, both for our company and for our customers and suppliers, with optimism and using strategies specially developed for these situations.