The first lockdown in March 2020 caused a sudden halt in economic activity and, therefore, a drop in demand, and for more than a year, many metallurgical companies have been reducing or stopping operations altogether.

Although demand is now picking up, the market is facing a new challenge: the shortage of raw materials, and prices have soared for many ores and metals, such as lithium, cobalt, nickel, steel, stainless steel, copper and graphite.


A recovery in demand in the autumn

During the autumn, we saw a gradual increase in demand with the rebound of the industrial sector and this sudden change is now creating an unprecedented shortage.

If we take the example of steel, prices began to rise in November 2020 and accelerated sharply this winter. They have now grown by 50%. But even more serious than these price rises is the issue of deadlines, which is shaking the entire industry – the risk of losing customers because of a lack of production capacity is more real than ever.

One manufacturer has testified to the situation, saying, “For two materials (steel and stainless steel), lead times have increased very rapidly since the end of 2020, with deliveries growing by 10 to 17 weeks compared to a normal lead time!”. (source FIM)

Furthermore, steel production in France is expected to fall by 20% compared to 2019.


From mining to processing, industry players have lacked visibility of the signs that demand was recovering. Faced with these shortages, metallurgical companies are drawing on their stocks and optimizing production to avoid scrap, but this may not be enough.

Inventories are disappearing fast and this situation, which started with the COVID-19 pandemic, is likely to continue and affect the rest of the supply chain further downstream.

How is it possible to forecast demand in an increasingly volatile market? >


Impact on the extended supply chain

The consequences of the pandemic and the tight flow of orders is upsetting an entire ecosystem. Some 84% of equipment manufacturers surveyed by the French organization FIEV (Federation of Vehicle Equipment Industries) say they are either directly or indirectly affected by supply problems for components or alloys. Copper, cobalt, nickel, lithium, graphite and aluminum are six metals that are essential for the manufacture of batteries, motors and the bodywork of electric vehicles.

As for the construction industry, for the past few weeks, manufacturers have had to deal with significant price increases and mounting delays for metallurgical products. Between September and December, the price of hot rolled sheet metal rose by 17.8% and concrete reinforcing bars by 12.8%. Aluminum, copper wire and brass ingots have also risen by between 10 and 40% in recent months.

But just as in the case of metallurgy, it is not just the price increases but the increasing delivery times that are worrying manufacturers. The survival of many construction companies is at stake as they have signed fixed-price contracts with penalties for late delivery.


In an increasingly interconnected and unpredictable market, these situations will become less and less rare. They clearly demonstrate the importance of inventory management and real-time visibility throughout the chain. More than ever, inventory optimization is an industry-wide issue and difficult to solve at the company level.

Only by synchronizing business between customers and suppliers can the effects of these disruptions be mitigated.