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At Supplyitall we serve multiple markets and verticals. We have industry specialists trained and experienced to update our team on trends and insights. Our end goal is always to serve you, our partners, with the finest products at the best possible cost. Keeping you well informed, we believe, will continue to strengthen our partnership. Whether you view this page as a cup half empty or an opportunity half full, we promise to share our knowledge with you.
Supply Chain Issues Update 7/26/2022
Increases in hardwood and softwood pulp pricing, between 46-86%, due to inflationary pressure on key inputs such as chlorine and caustic soda.
Increases in recycled fiber costs due to reduced supply increased by 276% since January 2020
Increases in transportation costs have risen by 30% since January 2022
Supply Chain Issues Update 4/1/2022
WASHINGTON (AP) — An inflation gauge closely monitored by the Federal Reserve jumped 6.4% in February compared with a year ago, with sharply higher prices for food, gasoline and other necessities squeezing Americans' finances.
The figure reported Thursday by the Commerce Department was the largest year-over-year rise since January 1982. Excluding volatile prices for food and energy, so-called core inflation increased 5.4% in February from 12 months earlier.
Robust consumer demand has combined with shortages of many goods to fuel the sharpest price jumps in four decades. Escalating the inflation pressures, Russia's invasion of Ukraine has disrupted global oil markets and accelerated prices for wheat, nickel and other key commodities.
The inflation spike took a toll on consumers, whose spending in February rose just 0.2%, down from a much larger 2.7% gain in January. Adjusted for inflation, spending actually fell 0.4% last month.
The Federal Reserve responded this month to the inflation surge by raising its benchmark short-term interest rate by a quarter-point from near zero, and it's likely to keep raising it well into next year. Because its rate affects many consumer and business loans, the Fed's rate hikes will make borrowing more expensive and could weaken the economy over time.
Supply Chain Issues Update 2/3/2022
Aluminum Prices Can’t Keep Up With Energy Costs, Driving Wave of Closures
Analysts predict supply of the metal will fall short of demand, creating another pinch point for industries such as auto manufacturing
By Rhiannon Hoyle and Joe Wallace
Updated Jan 30, 2022 1:49 pm ET
Tensions between the U.S. and Russia over Ukraine are exacerbating a shakeout in the aluminum sector, which has been hammered by rising power prices over the past year.
The price of aluminum has increased by 24% over the past six months to more than $3,100 a metric ton, approaching a decade high. The prospect of a Russian invasion of Ukraine has made matters worse. Russia is one of the world’s biggest aluminum producers and traders fear disruptions to its exports if conflict breaks out.
That is adding to the pressure that has built over months of rising energy costs. These have led to the closure of plants in China and Europe that haven’t been able to cut costs deep enough to remain profitable.
In Europe, natural-gas prices are almost five times as high as they were a year ago because of cold weather and a drop in the flow of gas from Russia. Energy can account for up to half of the cost of making aluminum, which is why traders nicknamed the commodity congealed electricity.
Traders fear smelter closures will make it tougher to secure supplies in a market that is used to having plenty of metal to go around. Rising aluminum costs are an added expense for buyers such as auto makers, already grappling with supply-chain constraints including a global computer-chip shortage.
Alcoa Corp. said late last year that it would shut its unprofitable San Ciprián aluminum plant in Spain, which has an annual capacity of 228,000 tons. It will likely be offline for roughly two years because of challenges stemming from what Alcoa called exorbitant energy prices. The price of electricity in Spain hit a record high late last year.
“This has been a challenging road for everyone involved,” Alcoa Chief Executive Roy Harvey said when announcing the decision.
Norwegian aluminum producer Norsk Hydro AS A also said it would cut output at a plant in Slovakia to 60% of its capacity in response to electricity prices which show no sign of falling in the short term.
Supply Chain Issues Update 1/5/2022
Over the course of a number of years, supplies of virgin white paper have been on the decline. The trend began as the demand for printing, writing, and newsprint started to decline with the growth of digital media, and production has continued to decline at a rate of approximately ten percent year over year. At the same time, paper manufactures shifted towards producing paper to align with the increase in e-commerce and, in particular, the demand for cardboard boxes. As has been widely reported, the Covid-19 pandemic made conditions worse by increasing e-commerce and the need for corrugated packaging that is required to support the growth in deliveries.
In addition to the systemic shift in the traditional demand for virgin white paper, most recently and largely due to Covid suppliers have also experienced labor and related production problems that we read almost daily are hampering the manufacturing sector at large. We are in close communication with our paper suppliers and know that they are making every effort to meet demand. However, it will be difficult to make up for lost production when current operations remain below normal levels.
We realize that the shortfall presents a difficult situation for you, and we are working on finding additional supplies of paper to support our operations and your business. We ask that you remain flexible and, in the interim, consider alternate paper substrates to meet your packaging needs in the short term. This could temporarily provide you with bags even if they are not consistent with your brand.
Supply Chain Issues Update 10/5/2021
Additional supply chain issues are expected as there is a shortage of coal being exported from Australia into China.
- The coal shortage has created power shortages and need for allocation to residents and away from manufacturing.
- Some plants are expected reduce production from 7 days a week to 3 days.
- Equipment will have to be taken off line during down days causing additional delays.
A 60-80% drop in productivity is expected by early November. The categories that will suffer the most are:
- Vinyl gloves
- Plastic cutlery and cutlery kits
- Plastic portion bags and cups
- PET cups
- Paper hot/cold cups
- Bagasse products
- Foil products
Supply Chain Problem Keeps Getting Worse
SupplyitAll distributes domestically manufactured and imported goods across many different verticals. Although our preference is made in the USA, some commodity items are a better value imported from overseas. Providing this forum of information confirms our commitment to be the most transparent distribution company within our industry. With this goal we share not only domestic pains and price increases but also worldwide issues.
The World Economy’s Supply Chain Problem Keeps Getting Worse
A supply chain crunch that was meant to be temporary now looks like it will last well into next year as the surging delta variant upends factory production in Asia and disrupts shipping, posing more shocks to the world economy.
Manufacturers reeling from shortages of key components and higher raw material and energy costs are being forced into bidding wars to get space on vessels, pushing freight rates to records and prompting some exporters to raise prices or simply cancel shipments altogether.
China’s determination to stamp out Covid has meant even a small number of cases can cause major disruptions to trade. This month the government temporarily closed part of the world’s third-busiest container port at Ningbo for two weeks after a single dockworker was found to have the delta variant. Earlier this year, wharves in Shenzhen were idled after the discovery of a handful of coronavirus cases.
“Port congestion and a shortage of container shipping capacity may last into the fourth quarter or even mid-2022,” said Hsieh Huey-Chuan, president of Taiwan-based Evergreen Marine Corp., the world’s seventh-biggest container liner, at an investor briefing on Aug. 20. “If the pandemic cannot be effectively contained, port congestion may become a new normal.”
The cost of sending a container from Asia to Europe is about 10 times higher than in May 2020, while the cost from Shanghai to Los Angeles has grown more than sixfold, according to the Drewry World Container Index. The global supply chain has become so fragile that a single, small accident “could easily have its effects compounded,” HSBC Holdings Plc. said in a note.
The spread of the delta variant, especially in Southeast Asia, is making it difficult for many factories to operate at all. In Vietnam, the government has ordered manufacturers to allow workers to sleep in their factories to try to keep exports moving.
On the other side of the planet, companies in the U.K. are grappling with record low levels of stock and retail selling prices are rising at the fastest pace since November 2017.
What Bloomberg Economics Says...
It is hard to see supply chain bottlenecks being resolved any time soon, with some major exporters including Indonesia and Vietnam still struggling to contain the delta outbreak. It could continue to drag on the global recovery by slowing production and pushing up costs, although not derailing it. At the heart of the price pressures is the transportation bottleneck.
Big retailers tend to have long-term contracts with container lines, but Asian production relies on networks of tens of thousands of small and medium-sized producers who often arrange shipping through logistics firms and freight forwarders. They in turn have been struggling to secure space for clients as vessel owners sell to the highest bidders.
Some 60% to 70% of shipping deals on the Asia-America route are done through spot or short-term deals, according to Michael Wang, an analyst at President Capital Management Corp. He said auction-style pricing may continue until Chinese New Year in February 2022.
Buyers agree. In Germany, more than half of the 3,000 firms polled by the Association of German Chambers of Industry and Commerce expected widespread supply-chain problems to persist into next year.
For Asian factories outside China, the problem is even worse. Many Chinese companies are willing to pay above-market rates to load their cargo, said a spokesman at HMM Co., South Korea’s biggest container line. So when the ships call at ports outside China, they’re already almost full.
Chinese companies that spent decades shifting production of lower-value components to cheaper labor markets in South and Southeast Asia now face the headache of trying to get those parts to factories where they can be assembled into finished products.
As factories succumb to lock-downs, manufacturers are forced into a game of whac-a-mole, switching raw materials from one country to another. Some have resorted to air-freighting materials to keep production lines rolling.
Product, Transportation & Operating Cost Inflation
Following up from our update in May, we want to provide the latest details on cost increase and future speculation.
- Resin costs have increased 5-7 cents almost every month in 2021
- Increased wages for drivers and distribution employees combined with a limited workforce pool
- Rapid and significant increases in inbound/outbound freight, and ocean freight costs
- Warehouse supply and maintenance increased costs
- Fleet maintenance and parts increases with limited availability
- Supplyitall transportation costs are up 33% (employee, fuel, maintenance)
- Supplyitall inventory value is up 47% (cost of goods on hand)
- Manufacturer price increases have nearly tripled compared to last year, while the size of increases are close to double digits on average and often greater.
- Manufacturer announced increases continue for July and August.
- Most recent Consumer Price Index for May shows an increase of 5%, the highest since 2008 or excluding food and energy since 1992.
Supplyitall’s management team works diligently to mitigate all increases and product shortages from hitting your bottom line and customer experience. We continue to work with alternate manufacturers and research viable substitutes to products in short supply. Our team will never stop working to give you the best product at the best possible price with a transparent view of our business.
Market Instability Update August 2021
- Polyethylene resin producers are implementing an 8th consecutive price increase to the market on all grades of polyethylene effective July 1, 2021. PE producers are citing continued supply and recovery constraints in addition to strong domestic demand.
- CNBC announces, “Container shipping rates have skyrocketed as the global economy bounced back from the Covid-19 pandemic and commodity demand recovered, while a shortage of containers exerted pressure on supply chains.”
- Maersk, the world’s largest container shipping firm, has posted a sharp increase in second-quarter earnings as congestions and bottlenecks continue to drive up shipping rates.
- The company on Friday reported earnings before interest, tax, depreciation and amortization (EBITDA) of $5.1 billion, a 200% increase from the $1.7 billion reported in the same period last year. Revenues were up almost 60% to $14.2 billion.
- Container shipping rates have skyrocketed as the global economy bounced back from the Covid-19 pandemic and commodity demand recovered, while a shortage of containers exerted pressure on supply chains. More recently, a combination of rising retailer orders and slower turnaround rates due to Covid-19 outbreaks in several countries has driven prices even higher.
- “Right now in container shipping we have effectively unmet demand. The global capacity is not able to lift all of the demand and that is what is driving up freight rates,” Skou told CNBC’s “Squawk Box Europe” on Friday.
- “At the same time, of course, we have had congestion in Los Angeles, we have had the Suez Canal closed for a week, we have one of the largest ports in China closed for more than a week in the last quarter, and that takes our capacity from the market, which adds to the problem, so to speak.”
- Rates from China to the United States, for instance, have scaled fresh record highs above $20,000 per 40-foot box, up more than 500% from a year ago, according to freight-tracking firm Freightos.
Market Instability Update May 2021
- 1.) U.S. inflation was 2.5 times more in April 2021 than it was in March 2021. This is the largest increase in over 8 years.
- 2.) Energy prices increased 13.2% in the past 12 months.
- 3.) Many U.S. businesses are facing worker shortages as the economy starts to reopen.
- - i. Economists expect employment pains to continue through 2022.
- - ii. Expanded unemployment benefits and Covid-19 fears are keeping many from seeking work.
Top 3 Causes Of Market Instability in March 2021
All resins have the ability to harden under certain conditions - by mixing with a setting agent, heated, or exposed to light. Such materials are highly viscous liquids before solidifying. The range of synthetic resins is huge and includes resins created from thermoplastics like ABS, Nylon, and Polypropylene. Some of these are referred to as resins only in their liquid form – after curing, they are simply called plastics or elastomers. Some resins after hardening can’t be melted or re-used. Different types of resins exist depending on their chemical compounds which define its properties: silicones, epoxies, acrylics, alkyds, and more.
What is resin material made of?
There is a huge variety of different resin materials, both natural and synthetic. Resins consist of long chains of monomers, which form cross-link bonds during the curing process.
What are the different types of resin?
Typically resins are divided into thermosets and thermoplastics based on whether or not the hardening reaction can be reversed. Widely used thermoplastic resins include ABS, polyethylene, polystyrene, and polycarbonate. Most common thermoset resins are polyester, vinyl ester, epoxy, and polyurethane.
Thermoplastic resins are basically the ones that can be melted and then hardened once cooled. Within the molecule chain of such resins, there are extremely strong bonds between molecules. Thermosets, on the contrary, undergo a non-reversible reaction resulting in a hard end product. It is determined by the process called polymerization or cross-linking which takes place in such materials caused by the use of a catalyst, heat or a combination of the two.
How is resin produced?
Production of artificial resins starts from a so-called cracking process, which means that different types of hydrocarbons are heated up to separate molecules. Then polymer compounds are built in order to create a specific resin.
2.) Winter storms at the end of February severely disrupt Polyethylene & Polypropylene production up to 85%.
The storm forced at least 50 major outages and closures, including most Gulf refineries, petrochemical plants, and steam crackers; all three propane dehydrogenation (PDH) units; and resin reactors accounting for an estimated 80 to 85% of all US polyethylene (PE) and polypropylene (PP) production.
3.) Gulf Coast logistics disruption with the complete shutdown of the Port of Houston, rail services, resin warehouses and highways.
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CURRENT PRICE INCREASES BY MONTH
2022 April Price Increase
ARVCO - All Products - 14% - 4/1/2022
Brown Paper - All Products - 8% - 4/1/2022
Clorox - All Products - 7% - 4/1/2022
Corby Hall - Dinnerware Products - 10% - 4/15/2022
Duro - All Products - 6% - 4/18/2022
Fantapak - All Stocked Products - 8% - 4/25/2022
Fabri-Kal - All Fiber Products - 4/1/2022
Heritage Bag - All Products - 3% - 5% - 4/28/2022
Hoffmaster - All Products - 8% - 4/1/2022
INNOPAK - Corrugated Products - 14% - 4/15/2022
INNOPAK - Specialty Bags - 8% - 25% - 4/15/2022
LK Packaging - All Products - 5.4% - 4/1/2022
Marietta - All Fiber Products - 8% - 4/1/2022
Misco - All Products - 3.5% - 6% - 4/1/2022
National Checking - Select Products - 6.5% - 4/1/2022
Norpak - Select Products - 8% - 4/1/2022
O'Dell - All Products - 6% - 4/4/2022
Sabert - Select Products - 8% - 4/1/2022
Vineland Packaging - All Products - 12% - 4/22/2022
2022 May Price Increase
Delta Paper - All Products - 7% - 10% - 5/4/2022
Eatery Essentials - PET Products - 5.5% - 5/1/2022
Eatery Essentials - Paper Products - 10% - 5/1/2022
Eatery Essentials - PLA Products - 3% - 5/1/2022
Placon - All Products - 10% - 5/2/2022
Plastirun - All Products - 10% - 5/16/2022
Sabert - All Products - 5% - 5/1/2022
Southern Champion - All Products - 6% - 5/29/2022
2022 June Price Increase
American Royal - All Products/Excluding Gloves - 5% - 6/1/2022
Dart - All Products - 6% - 10% - 6/1/2022
Graphic Packaging - All Products - 8% - 6/1/2022
Lyons Magnus - All Products - 6/15/2022
O'Dell - All Products - 4% - 6/1/2022
2022 July Price Increase
Freeport Paper - Print Pizza/Tote boxes - 5% - 7/1/2022
Glissen - Various Products - 7/1/2022
Heritage Bag - All Product - 4% - 7/11/2022
Inno-Pak - All Product - 3% - 7/1/2022
Inno-Pak - Inno-Box - 9% - 7/1/2022
Kimberley Clark - Tissues - 7/1/2022
Pactiv - All Products - 8% - 7/1/2022
Sabert - All PET, CPET Products - 12% - 8/1/2022
Southern Champion - All Product - 8% - 7/31/2022
2022 August Price Increase
Hamilton Beach - Stirrers Only - 30% - 8/1/2022
Kimberley Clark - Towel,Tissue,Skincare, and Wipers - 25% - 8/1/2022
Kimberley Clark - PPE - 10% - 8/1/2022
Phade - Stirrers Only - 30% - 8/1/2022
2022 September Price Increase
Pactic - PET, APET, RPET - 12% - 9/1/2022