Recently we received below message from the CEO of our supplier Fandis:
For some months, there has been in Europe a severe shortage of plastic raw materials, with a consequent rise in prices. The assumptions of the current situation suggest that this trend will continue in the next few months and the whole plastics supply chain will be significantly affected.
There are different reasons, including the sales prices in Asian markets that are higher than in Europe: indeed the demand is strong in Turkey, Russia, India and, above all, in China, which is the first and also the only market restarted after the Covid-19 emergency.
Together with plastics, even noble and non-noble metals (magnetic steel for example) prices have been drastically increased over the last month, in some cases more than 30%, and a further contraction will complicate the situation even more. Increases on paper and cardboard have effects on the product packaging costs, as well as all electronic components.
Finally, regarding the transport issue, the lack of containers on European routes and the speculative activity of blank sailing by shipping companies, has increased the prices of container freight, in many cases by over 300%, with the obvious effect on the final cost of the product or raw material.
According to analysts, the situation of transport and raw materials will certainly affect the entire first half of the year, and we need to wait a few months before understanding the trend of the second half of the year.
We are confident you will understand that this situation inevitably influences also our activities. We will therefore inform you directly and promptly about specific circumstances.
In case above situation will have any effect on your (upcoming) orders, we will inform you asap.
