Shortages And High Prices – Steelmakers Impact Not Only The Oil Industry, But Also Auto Manufacturers

Steel Mills Have Increased Prices by More Than 100% Since the Beginning of the Pandemic, Prioritizing Exports and Impacting the Oil Industry

Since April, the largest steel mills in Brazil have increased steel prices by more than 100% and, due to the rise of the US dollar, have prioritized the external market. Last week, the National Association of Motor Vehicle Manufacturers (ANFAVEA) attempted to negotiate with the steel mills producing flat steels but backed out, stating that there are no supplies. The same situation occurred in the oil and gas sector.

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Companies That Have Started Shutting Down Their Assembly Lines: Mercedes-Benz Canceled Two Additional Saturday Productions Needed to Meet Strong Demand. At General Motors, there is a notice that the production of the S10 will be suspended for one or two days over the next two weeks.

After the economic crisis caused by the pandemic and the disruption of the production chain forced factories in different sectors to suspend production for several months, demand has recovered faster than expected.

Delivery delays have directly impacted production at a time when the market is starting to react. The waiting list is already long, especially for companies that use fleets, such as rental agencies. The wait can be at least two months.

There has not been a complete halt yet, but delays are slowing production, especially as the market begins to react. There is already a long waiting list, which could reach two months at least. Due to the lack of parts, delivery delays for trucks made at the Volks factory in Resende (RJ) could exceed months.

Luiz Carlos Moraes, president of Anfavea, says, “Automakers are even using air freight to expedite the delivery of materials and reduce time, but there is an increase in cost. Our supply chain is very long, with a lot of imported materials.”