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Germany to run into supply issues?

The German economy may soon feel the brunt of material shortages, along with price increases for raw materials and intermediate products, according to local newspaper Handelsblatt.

The story is based on research by consulting firm Horvath, which presented its findings to the paper. According to the survey, the price of wood is expected to increase by a third over the rest of 2021, while other commodities have seen their prices increase by 30% since last Autumn.

Danilo Zatta, pricing expert at Horvath, told Handelsblatt: “Every two to three days, commodity prices are adjusted upwards. The trend is set by North America and China, where prices are already a third higher than in Europe.”

Among the commodities with the largest price increase have been wood and metallic secondary raw materials, according to the Horvath study. The former has doubled in price from September 2020, while the latter has increased by 65% since last Autumn. Prices for chemicals and plastics remain at their highest levels.

Other commodities that have increased in price are steel, which is up 60% since the beginning of the year. Those surveyed by Horvath said they expected it to increase by another 18% over the remainder of 2021. “The still-limited supply is offset by customers who have almost used up their inventories,” wrote Handelsblatt, “but now suddenly have a high demand for steel due to the skyrocketing global economy.”

Not just one sector

The automotive industry within Germany is also suffering from a lack of semi-conductors, as Expert Investor reported a few weeks ago. The latest assessments from the industry, say Handelsblatt, is that passenger car sales are only expected to grow by 3%, down from previous predictions of 8%. Production is also being affected by the coronavirus situation in Malaysia, where most semiconductors used in German cars are made. The automakers Volkswagen, BMW, and Daimler are all anticipating a squeeze on their activities because of this, says Handelsblatt.

Other events impacting the economy were winter storms within the US, the blocking of the Suez Canal, and the continuing coronavirus pandemic.

Pete Carvill

Pete Carvill is a reporter, writer, and editor based in Berlin who has been writing for the B2B and mainstream media since 2007. He is a contributing writer for Expert Investor Europe and, in addition,...