On 2/28/2022, we published a blog stating that we expected wire pricing and lead times to stabilize and potentially start to decline to begin the 2nd quarter, 2022. We also stated that our industry is a volatile industry where anything can happen, and it did, the Russians invaded Ukraine on 2/24/2022. We are now feeling the results of this invasion. Now, everything has increased again in the past few days; iron, ore, zinc etc. The Russians participate in 15% of global steel production and account for a fifth of the global trade in natural gas. On Thurs, 3/3/2022, ArcelorMittal, the world’s second-largest steelmaker, shut down their Ukrainian steel mill. This plant accounted for 6.6% of 2020 production, making it the largest individual industrial site.
This war has already caused energy prices to soar and shipping costs to increase. Global companies now have to rethink operations and distribution systems as they cut off trade to comply with sanctions placed on Russia. This war will have ripple effects, causing the supply chain pipeline, just now recovering from the pandemic, to drain again, putting at risk global supplies of steel and other goods.
Until this war comes to an end or is resolved in some matter, it will be very difficult to predict any type of softening. It is highly recommended that our customers place orders now, rather than later, to lock in current pricing and most importantly, capture what material is in the pipeline before it has the potential to go dry.