BUSINESS BAROMETER
WHY ARE FASTENER PRICES RISING IN 2021? Torque Magazine breaks down some of the key reasons behind the price rises affecting the fixing, fastener and tool industries...
CONTAINER SHORTAGES Container prices have quadrupled in a matter of months, eroding margins to such an extent that importers are having to pass on at least some of the costs. Why the steep rise for these metal boxes? There’s a global shortage – and a vast number of containers in the wrong part of the world and not where they are needed. With availability of containers low, shipping prices have risen for importers to the tune of from $2,000 to $10,000 – understandably hitting margins significantly.
STEEL PRICES AND AVAILABILITY Raw material prices are significantly up; Everything from rubber to aluminium and, inevitably, steel (a per tonne low of $327 in April 2020 to approx. $600 in Feb 2021). Prices have been pushed up in part thanks to steel mill owners operating well under capacity in 2020 while they waited for demand to ramp up again. However demand has returned quicker than expected with one steel mill operator admitting “supply is far from matching demand” (CSC) and citing “higher coking coal prices” pushing up steel prices. We also hear of larger manufacturers making bigger raw material orders to minimise their disruption in anticipation of raw material shortages, constricting supply further still.
STOCK SHORTAGES – CORONA When Covid‐19 shut factories in China back in early 2020, stock shortages were among the early business concerns. Those fears have truly now materialised. Off the record chats confirm that wholesalers are currently operating with far less stock availability than usual. Exacerbated by port disruption, drivers forced to self‐ isolate with Covid‐19 symptoms, storage capacity taken up by government PPE orders, an unforeseen rocket in DIY and construction product… the supply chain is far from ‘normal’ and with scarcity of materials also in the mix, warehouse shelves are emptier than usual.
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