Supply Chain BackUp | Steel Scarcity
According to LaborNotes, the supply chain crisis that began in 2020 resulted from a sharp increase in the demand for durable products by consumers due to the pandemic. However, while it could be that the supply chain backup began before the pandemic, there is plenty of evidence that the global supply chain backup affects industries massively.
Supply chain bottlenecks feed on one another, with shortages of parts and surging prices of important raw materials such as steel, squeezing manufacturers globally. This article highlights more about the supply chain backup and how it affects steel shortages for different high-end manufacturers like Meek Mirrors.
The State of the Supply Chain
Strict COVID-testing protocols and restrictions have led to delays in major ports globally, featuring some of the worst ever recorded congestion. A little while after the pandemic effects started to wear off, the Russian invasion of Ukraine made things worse for the supply chain. Millions of containers intended for travel from China to Europe by train through Russia must not be transported by sea, mostly as sanctions on Russia took effect.
The Russian invasion also severed critical supply lines for aluminum—a highly sought-after metal—nickel, and different food items, causing commodity prices to surge. Various European automotive lines, relying on the supply of wiring from factories in Ukraine, have cut their output due to a shortage of the same.
If the pandemic caused the global supply chain to buckle, China’s persisting zero-COVID policy and Russian invasion risk breaking it entirely. Manufacturers will face continuous loss unless they adopt strategies to survive amidst the raging supply chain backup.
Are There Other Causes of the Supply Chain Backup?
Key trends and disruptions impacting global supply include:
- Logistics disruption
- Production delays
- Over relying on a limited number of third parties
- Commodity pricing
- Reduced workforce and labor.
Individually or collectively, these trends affect the availability of important food items and raw materials such as steel.
Steel Shortage in 2022
Steel is constantly a desired commodity in the market. Since 1961, Meek Mirrors has manufactured top-of-the-line steel products for its clientele worldwide. It is, therefore, unsurprising that Meek Mirrors, like any other manufacturer, is likely to be impacted by the global steel shortage.
The World Steel Association (WSA) reports a 2.2% projected growth in steel demand in 2022. Unfortunately, shortages are causing market issues. The current steel shortage is due to supply chain setbacks impacting steel delivery, simultaneously projecting the demand for this critical raw material.
Due to the spread of the COVID-19 in the last 2-3 years, mill outages and transportation blockages have also contributed to the steel shortage. The recent Russian invasion came as an unexpected shock for the local steel industry. The majority of Ukrainian steel plants suspended operations for safety reasons.
In 2021, the backlogged demand for steel led to strong manufacturing activities, which helped the steel market. Due to the high number of vaccinated individuals and government support, developed countries globally outperformed WSA’s expectations. Unfortunately, despite this brief improvement, global supply chain backup is preventing an impressive recovery in 2022.
Is There Hope for Manufacturers?
Provided there is government support, the steel market will undoubtedly recover, and steel will once more be a readily available commodity. The global supply chain backup will also evaporate as countries constantly tackle the manageable pandemic while finding ways to restore political stability with the sanctioned countries.
Regardless, Meek Mirrors takes constant efforts to ensure uninterrupted production of steel products, including high-end stainless steel security mirrors. Contact us to schedule a consultation or learn more about our products and services.
