Two years after the outbreak of the pandemic, the price of raw materials continues to rise
One of the most obvious consequences of the pandemic in the manufacturing sector is the – in many ways uncontrolled – rise in raw material prices. This was first noticed by entrepreneurs, who immediately decided to roll up their sleeves and go back to work as before the period of forced shutdown that unfortunately characterised so many cases in 2020, and for some time now, customers have also been noticing it, not hesitating to make their displeasure felt.
But what has caused this rise in raw material prices? Apart from the economic and health crisis brought about by Covid-19, there are numerous factors that have contributed to the situation we are experiencing today, and in this short article we will try to explain the main ones. In this way, it will be easier to understand why even the most solid companies have been forced to offer their products at a higher price than before the pandemic.
Rising commodity prices: what led to such a major problem
The serious problem faced by virtually all businesses in the manufacturing sector began in 2020 at the height of the lockdown when the forced closure of mining facilities of all types led to a decrease in the availability not only of raw materials, but also of semi-finished products. When the following months saw a strong recovery of the sector – quite unexpected in many ways – led by the USA and China with consequent growth in demand for these products, price increases were inevitable.
Furthermore, the European market has found itself in greater difficulty than those in other parts of the world because the so-called ‘safeguard measures’ are still in force. These are a series of rules introduced into European legislation that provide for duties of 25% if a company exceeds the import limits from a non-EU country. The disadvantage that these measures create for European companies is enormous. And the fact that the price increase affects all forged materials and more does not improve the situation.
It is impossible to predict when a solution will be found or even to estimate when the situation will stabilise. In the meantime, it is to be hoped that the European authorities – but not only – will be able to find answers for all the struggling entrepreneurs and their customers.