Another sad day when we received the following from our main supplier:
26 April 2022
Dear Darren Lee
Unfortunately, the challenging trading conditions we have all experienced over the past two years are still present in the supply of steel products, due to key events such as the Russia-Ukraine war and the recent floods in Kwazulu-Natal. These events are adding additional pressure on an already congested supply chain environment.
With this letter we wish to provide you as our customer with insight into the most recent communication received from our suppliers on different material types, relating to pricing and availability.
The Stainless Steel prices, as received from Columbus Steel, increased with 10% from March 2022 to April 2022 and will increase again by 18% effective 1 May 2022. The large driver behind these increases is the price of Nickel, which during March surged to such an extent that trading on the London Metal Exchange was halted for a limited period. Please refer to the link for more information in this regard. The price increase on Stainless Steel products over the first five months of the calendar year equates to 45%.
Although ArcelorMittal will not be changing the prices on flat steel products effective 1 April 2022, they did confirm that a future price increase is imperative given the rising costs of raw material and input costs. The prices on long products were however increased with 12%.
Hulamin notified us of an 8% increase that took effect on 1 April 2022, bringing the calendar year-to-date increase to 23%. More recently they also declared a force majeure on their current deliveries due to the floods and heavy rainfall in the KwaZulu-Natal region. This adds further pressure on the procurement of gas and other input costs and will subsequently have an impact on price as well as availability in the near future.
Since we predicted the possible shortage near the end of the 2021 calendar year, we were able to adjust our procurement strategy accordingly. Therefore, rest assured, we will continue to provide our customers with the best quality products at a competitive price.
Should there be any changes in the indicators referred to above, we will be sure to communicate it timeously.