As most of the world continues to navigate the unprecedented global supply chain issues, Redex Group, Inc. is committed to keeping you updated regarding material lead-time impacts, pricing volatility and other market trends.
We are currently experiencing supply chain issues from our steel and aluminum sources in Europe. We ask for your patience and understanding as we seek to improve our supplies and find new channels.
Russia is the second largest producer of aluminum, accounting for 6 percent of global smelter production. With the global aluminum market already tightly constrained, prices have increased by over 13 percent since the start of the conflict.
Russia is the seventh largest copper-producing nation, accounting for 4 to 5 percent of global production. While this is less significant than some other materials, instability and uncertainty — coupled with declining stockpiles — has resulted in the price of copper hitting an all-time high at the end of last week.
Both Russia and Ukraine provide critical supply chains to semiconductor (chip) components, including 40 percent of global palladium supplies, 70 percent of global neon production and 10 percent of global nickel supplies. We expect that the worldwide semiconductor shortage will worsen should the conflict continue.
Material Lead Times
While we have seen pockets of recovery in material constraints in some categories, transportation challenges, raw material constraints and labor shortages continue to drive volatility and instability in product lead times from our suppliers.
Ocean freight remains a significant bottleneck at U.S. ports. The number of container ships queued to enter the ports of Los Angeles and Long Beach has declined by 30 percent — the lowest number since November — but container lead times have yet to improve.
Since March 2020, product lead times increased at an average of nearly 60 percent across all products in all core markets we serve (construction, industrial and utility). We were seeing improvements in the supply of several commodities, but this will have been impacted by the recent military actions in Ukraine.
COVID cases have declined considerably in the United States, but labor shortages continue with a record number of open positions. The labor participation rate is at its lowest point since the 1970s.
Please understand that this information can change at any time. We are working diligently to provide you with the most current information.