Global Supply & Demand Shocks for Raw Materials During COVID-19

The COVID-19 pandemic has long-term and far-reaching impacts on manufacturing industries. Supply shortages and excess demand are leading to higher prices of many raw materials, including copper, lumber, oil, PVC, PP, EVA and other plastic materials.

In May 2021, the copper price hits $10,000 per tonne for the first time in 10 years, and CME lumber futures price reached almost $1700 per mbf. Global pulp price has increased by 55% and seems to continue to rise. The oil price has risen by 70 percent, hitting $70 per barrel since November 2020. And so too are plastics, the U.S. export prices of PVC have nearly doubled to a record high of $1,775 per tonne over the past year and the prices of other plastics materials also increased by 20% to 50%.

What’s causing price increases and shortage of raw materials? There are a lot of different factors contributing to this issue, but the primary reason is the imbalance between supply and demand in the global supply chain which pushes the raw material prices to new highs since the start of the pandemic.

If you want to find out the key challenges on both supply and demand side, visit CTi’s website to read the full article.

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