19 MAY 2021

Shortage of raw materials and rising prices: how to cope with the current situation and look to the future

The factory shutdowns caused by the Covid pandemic worldwide over the last year have generated a chaotic situation that continues to affect the entire manufacturing sector, including Italy.

The difficulty in finding raw materials and the resulting shipping crisis, combined with an increase in demand, have generated a surge in prices. Price increases are reaching worrying peaks, especially as regards metals (copper: +26%, iron: +38%) and petroleum derivatives (+53%). As of last year, PE, PP and PVC market prices have more than doubled.

This globally generalized situation is hitting harder those countries like Italy that are mainly concerned with the transformation of raw materials and derivatives imported from abroad. The unavailability of such materials together with the increasing prices are resulting in significantly longer delivery times of finished products.

The strategy that many entrepreneurs, including us at Unionplast, have decided to adopt has been to increase their stocks to ensure the supply of raw materials for the coming months, even if this has often meant closing blank contracts, with uncertain costs and delivery times.

We continue processing orders as usual, but also need to take into account the shortage of available raw materials as well as the timing of their procurement. At Unionplast, we are striving to make a flexible schedule of delivery times, planning it jointly with our customers so as to optimize our work and fulfil all orders.

The current forecasts bode well for stabilized prices immediately after the summer, even though they are likely to remain high. We hope that there will be more available raw materials shortly, so as to guarantee the whole sector a real restart of its activities.