INTERNATIONAL NEWS
INCORPORATING COLD CHAIN
Concern over impact of crisis in raw materials in cold sector By AEFYT
The Spanish association for refrigeration technology has cautioned that since the end of last year , the shortage of raw materials marked by supply problems and the rise in price of many of these such as copper , oil , and their derivatives , is having a significant impact on an essential sector – refrigeration .
This circumstance has created a situation where manufacturers have suffered for months and is now also affecting installers of refrigeration systems . Given the current situation , demand is being covered with previous inventories , but the imbalance between supply and demand is accentuating .
Many of the essential materials for the execution of CO₂ installations are not available on the international market and distributors cannot guarantee short-term deliveries . Likewise , in the case of other materials needed in installations with other refrigerant gases , the delivery times are uncertain due to the collapse of the market . This circumstance affects both the completion of new facilities and the maintenance of existing ones .
Consequently , in the short term it is likely that the rise in prices of raw materials and the shortage of others are having an impact on current costs , especially in machinery and components . In addition , some non-essential activities could stop , a slowdown in investment and a decline in sustainable solutions based on clean technologies due to having to provide adapted solutions may arise .
Yasin Hm | Unsplash
The cost of some raw materials such as steel and copper has already increased threefold over the last few months as supply chains experience delays and demand for components cannot be met . These circumstances are affecting both manufacturing and installations in the refrigeration sector .
As Susana Rodríguez , president of AEFYT ( Association of Cold and Cold Companies and its Technologies ) points out , “ At this time when the demand for the services of refrigeration and air conditioning companies is increasing , current market conditions are making it that the effects to obtain the necessary material to provide their services are severe .”
In short , the rise in the prices of most raw materials is having a great impact on the global economy . In the opinion of AEFYT , everything indicates that it is urgent to adopt measures that favour an economic re-balancing from collaboration with public administrations , which must be actively involved , to boost production in the European Union after decades of relocation . Only with the implementation of measures of this type will it be possible to stop the rise in prices of these raw materials and avoid speculation that could lead to an even greater increase in the costs of certain materials , as well as mitigate inflation in industrial production and competitiveness .
BACKGROUND AND GLOBAL SITUATION It should be noted that the shortage of certain electronic components affects not only the manufacture of various equipment and accessories , but many ventilation systems that incorporate chipsets and other related components . The situation is marked by somewhat of a destabilisation throughout the international industry and this impacts multiple sectors , including refrigeration .
It is also a situation that affects the whole of Europe , with a very high dependence on Asia in terms of required raw materials , worsened by the trade war between the United States and China that has existed for years and disruption in general logistics , particularly the slowdown in the usual flow of goods by sea from China , one of the main channels of world trade , as a result of the continued outbreaks of Covid-19 .
This repositioning has caused delays and sometimes shutdown in different ports and further effects are the added cost of freight during the last year , up by around 400 %. In this context , a significant effort is required by the logistics industry to respond to demand , which will probably require increasing its capacity by acquiring the necessary equipment to reduce waiting times .
It is indeed considered a crisis where experts predict no correction earlier than the end of 2021 . Meanwhile , the prices of raw materials necessary in multiple production processes - steel , aluminium , or copper - have reached increases of up to 80 %. The steep rise in prices is so rapid that with certain materials they have nearly tripled in cost over the last few months . CLA
12 www . coldlinkafrica . co . za COLD LINK AFRICA • October 2021