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Raw material situation is still critical

12. November 2021
Products

Most of us already experienced the impact on the own business: The raw material situation is still precarious. According to Commerzbank, the manufacturing industry in Germany had to decrease its output for the third consecutive month in October. An Ifo survey from the end of October shows that about 70 % of producing companies struggle with raw material supply. But what causes the actual situation anyway? 

The scarcity has several reasons

As in many fields of daily life, the corona pandemic influences the procurement market as well. Due to local lockdowns, problems with the realization of hygienic provisions, and muted demand, many raw material producers had to decrease their production. Now many of them have problems satisfying the demand, which has rapidly increased again – according to an IHK report.

In addition, the breakdown of passenger air traffic reduced transport capacities of the whole air traffic drastically. Hence, the majority of containers get transported via the seaway. As a consequence, empty containers are in short supply. This in turn leads to skyrocketing transport costs and delayed as well as failed supplies. 

On the plastics market, many producers of intermediate products shut down their production completely due to the unclear market situation. Shortly after, the demand from USA and China bumped up suddenly. A massive delivery backlog is a consequence, and its impact will be noticeable far into 2022. The increased transport costs fuel the rising of prices additionally. In the case of many metals, wood, and several other raw goods the situation is not any better according to ratioform

On top of this, the consequences of the Suez Canal shipping accident are still present. On the 23rd of march the container ship “Ever Given” ran aground and blocked the trade route, which is crucial for the world market for six days. 

An end of misery is not in sight

When the raw material markets will return to normality cannot be predicted seriously by anybody. The BME (The German Federation for materials management) expects that supply shortages will continue far into 2022. 

Impact of the raw material scarcity on PAPUREX

Obviously, PAPUREX cannot avoid this situation either. Almost all raw materials that are necessary for the manufacturing of our polyurethane tubing are difficult to procure at the moment. In many cases, our suppliers cannot keep agreed delivery dates or worse are not able to deliver at all. It is part of our self-image to do anything we can to ensure the supply of our customers. However, PAPUREX might not able to compensate for these external influences completely. Of course, we take great efforts to solve this situation together with our customers at best possible. 

We wish all business partners and customers to come off well this difficult time.