The raw materials industry is still under significant stress. Market demand is high, and constrained supply has kept material prices at levels never seen before in the US and global markets. Moreover, the turmoil in Ukraine has complicated an already challenging situation.

The following are essential considerations in keeping material prices high:

• There is no slack in the supply chain as a result of high demand for production mixed with limited supply.
• The price of oil has now reached a ten-year high. It has doubled since January 2021 - Brent Crude Oil's most recent price chart.
• The price of silica sand has grown by 15-20%, affecting the price of glass fiber.
• Energy prices continue to grow, putting pressure on material production costs.
• There are still worldwide shipping concerns with delays, and charges remain exorbitant.
• The shortage of logistics personnel and HGV drivers, particularly for delivering hazardous products, resulted from the large number of people compelled to self-isolate due to Covid and the continued impact of EU-Exit in the UK. This is exacerbated by the war in Ukraine, as drivers return to protect their nation.
• Other sectors are vying for the same restricted supply of raw materials.
• The effect extends to all resin systems and specialty chemicals, such as glass and carbon fiber, organic peroxides, and many more.

The market should emphasize that raw material scarcity and price hikes are not exclusive to the composites industry.

These elements continue to impact significant parts of the composites business, timber industry, aggregate industry, plastics industry, and chemicals sector, to mention a few.

• In 2021, engineering thermoplastic costs increased by 28%.
• The price of standard thermoplastics increased by 70% in 2021.
• Concrete rebar is now about 43% more expensive than it was a year ago.
• Steel prices reached a new high in 2021 and expect to continue high through 2022.
• In September 2021, timber prices were 48% higher than the previous year.

Long-term outcomes are challenging to forecast. However, sources indicate that raw material costs will stay high until at least early Q3 2022, and global shipping and transportation concerns may not resolve until 2023.

Similarly, the RMPI (Raw Materials Price Index) fell 0.1% month over month in June but grew 32.4% year over year.

https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1810026801

Table: 18-10-0268-01

Release date: 2022-07-20

Geography: Canada

Metal ore concentrates, and scrap prices (-4.1%) fell for the third month. Monthly metal waste and scrap costs declined 9.5%, while nickel ores and concentrates dipped 4.1%.

Rapeseed oil prices fell 11.6% in June, the most extensive monthly loss since October 2008 (-13.3%). However, prices were 28.4% higher year on year compared to June 2021. Market predictions impacted lower rapeseed oil prices that the domestic supply constraint will ease. From June 1 to June 30, the November futures contract price plummeted nearly 17%.

Considering all the stats for 2021, we can speculate that the trend will continue to progress. However, the only thing we can learn from such tendencies is the resilient need for planning and resourcing the materials.