December at-a-glance…materials & handling

Metal supply could challenge recovery

A shortage in the nation’s metal supply is adding insult to COVID-19 injury as several NAFEM members report challenges in finding the steel they need.

The Coalition of American Metals Manufacturers and Users (CAMMU) reports that, based on information from its member manufacturers, steel-using companies are reporting severe supply problems and price spikes. On the spot market, most mills are out of availability in January and have yet to open up their February books. Service centers that would normally trade among themselves have little steel to meet new orders, let alone to sell to other service centers.

More market participants warned that a lack of steel could halt some manufacturing in the next few weeks. Many expect mill shutdowns because of the back-to-back three day weekends caused by Christmas and New Years to slow steel production and deliveries in the last two weeks of 2020.

The issues stem from a combination of steelmakers trying to keep up with a resurgence in orders from U.S. manufacturers, just months after preparing for a pandemic-driven slump in demand, as well as delays in raw material availability.

Escalating shipping rates cause supply chain uncertainty

Ocean and air freight rates – especially between the U.S. and China – continue to escalate as global consumers working from home due to the pandemic increase e-commerce purchases. Air freight rates, in particular, continue to climb due to greater demand for fewer flights. S&P Global Platts, an independent firm that provides energy and commodities information, addresses what’s ahead for the global shipping markets in its Changing Track report.