Trade Winds update volume 53
Dear Valued Customer,
We would like to draw your attention to possible disruptions that may occur due to the ongoing Ukraine conflict that can affect all downstream supply chains in various forms. Already we are seeing manufacturing plants in Europe suspending production due to the extraordinary increases in energy costs that continue to rise daily. It is impossible to quantify or offer any direction except to highlight the possibility of price increases and supply problems across the board at some time in the future without notice.
Our hope is for a positive outcome to the crisis and that operations around the world can normalize as soon as possible.
ArcelorMittal’s planned maintenance comes into effect, ArcelorMittal has given notice that one of its furnaces situated at Vanderbijlpark plant will come offline and go into maintenance, this furnace is one of two that is used for flat products which is expected to result in a shortage in special sized coil as well as certain Carbon Steel plate sizes. Although the furnace is only expected to be offline for three weeks, it takes roughly another four weeks for the furnace to get back to optimal production levels.
The offline period for Blast Furnace D is 3 March to 23 March 2022.
The second blast furnace in Vanderbijlpark will continue to operate at full production capacity and in addition, the Vaal Meltshop will run for a longer period than planned in support of the interim repair of the Newcastle blast furnace scheduled for late April to end June 2022.
Announcement of price increase of Zinc extras; following a review of the international zinc prices over the past few months and zinc extras for Galvanised
(PL140) and Colour Coated (PL145, PL147) products, ArcelorMittal has concluded that the extras should be adjusted with effect from 1 April 2022.
The zinc extras will therefore increase around 19.2% or roughly 2.5% of the final product price. The impact of the changes will vary based on the specific products purchased and could be higher or lower than this.
Aluminium prices set to increase; effective 1st April 2022 the price of Aluminium Alloys in South Africa will increase across the board by approximately 11%.
Stainless Steel prices unstable due to Nickel Price increase; Stainless Steel prices are currently extremely volatile, supported by the huge increase in the price of nickel, prices are currently being confirmed on the day of order placement and this will remain the trend for the foreseeable future.
Load shedding is back and could be worse than ever, Eskom announced on Monday that load shedding would be in place at stage 2 later that day and run until Saturday, on Wednesday the country dropped into stage in 4 load shedding although latest news is more positive and we could return to stage 2 on Friday.
With the current fuel crisis and Eskom’s coal generators breaking down, the cost to keep the lights on are extremely high as the power utility requires 9million litres of diesel a day to generate power.
Fears are that once surplus diesel levels run out, the embattled power utility will not be able to cope with high costs of fuel and the country could slip into total darkness.
Fuel price on constant rise, due to the Ukraine/Russia conflict, fuel prices are on a steep rise across the world. South Africa has just recently endured a R1.43 increase taking the price per litre to R21.47.
A further increase is expected next month with an audacious price on the cards of nearing R40/Litre. The impact the fuel hikes are having are not felt yet but will be in the coming weeks and months as the price hikes affect base prices of plastic products such as PVC, HDPE as well as push logistic prices up.
Please expect a notice of increase in logistic rates soon!
Airline & Seafreight war surcharges are being implemented for all cargo movement within certain global zones and more information regarding this will be advised soon.
“Ambition is the path to success. Persistence is the vehicle you arrive in.”