Raw materials: skyrocketing prices and factories at an impasse

Just now that demand is starting up again, the factories are in danger of coming to a halt…  How is it possible?

Raw materials are nowadays unavailable and very expensive and for a country like Italy that imports almost everything, the situation is very serious and caused by 3 factors:

In the first few months of the pandemic, the value of raw material prices fell by 20-30 % and China, with its planned economy, stocked up. Nevertheless, the prices are now skyrocketing, why?

All the countries start suddenly with a sprint but with empty warehouses!
The companies, in fact, are used to not have stocks with the organization “just in time” (and/or Kanban) in order to be more efficient.

Raw materials, moreover, have become a very interesting investment because they are priced in dollars (at the moment weak currency) therefore convenient for those who buy in euros or other currencies.

Last but not least, there has been a meaningful increase of the transport costs (+605% is the value recorded by Dry Baltic Index) caused also by the introduction of a new regulation that imposes to the ships to lower the sulphur amount in fuel oil, change which led to the scrapping and/or restructuring of certain ships.
According to the experts, this situation will normalize in the coming months except for some materials that are necessary for the “revolutions” in progress in the production system, which are the green and digital transition. We talk about “essential” materials such as copper, lithium, silicon, cobalt, rare-earth materials, nickel, tin and zinc.
So how can we get out of this situation?

Last October, EU set up Alliance for raw materials in order to become more independent with 3 targets:

• Promoting the mining of heavy metals in Europe using advanced technologies;
• Reinforcing the recycling of precious metals;
• Building a common foreign and industrial policy to obtain concessions for minerals not found in the territory.

What is DiCOmo doing to help partners in this difficult time?
Even in this case, the work of DiCOmo, connecting end customers with industrial partners is a plus that allows you to anticipate and solve any problems that may arise from emergencies like the one we are experiencing.

Relying on DiCOmo, therefore, is a winning choice!