http://blog.pucp.edu.pe/blog/programadeactividadesacademicas/tag/analisis-de-problemas/

State of our market. April 2021

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Telju Fitness

State of our market. April 2021

 

Current situation.

 

We are faced with an unusual combination of factors that is causing widespread shortages and rising commodity prices.

 

After a few months of uncertainty due to Covid 19, global demand has increased considerably and has affected the industry, which has not been able to react as quickly as the market demands, causing supply problems.

 

Logistics and packaging costs increased as a result of the economic slowdown.

 

A mixture of problems of increased demand, capacity and supply together with a restricted transport resources is increasing uncertainty in the market causing a sharp rise in raw material prices along with supply difficulties.

 

There are suppliers that have closed factories. Strong demand from certain markets is driving prices up, to which we can add the unexpected and rapid V-shaped recovery in China. Many suppliers are diverting raw materials to their local markets instead of Europe, which has pushed prices up even more.

 

The declaration of Force Majeure around the world has had a direct impact on other companies in the price and availability of raw materials.

 

The shortage of containers has led to a sharp increase in transport costs (+ 400%) from Asia to Europe. Increasing demand for services and increasingly tight delivery times push rates up and shipping costs are likely to be higher.

 

The consequences of the pandemic for the sector at the international level are translated into market disturbances, caution against Chinese policies and a notable price spike.

 

Main factors:

Reactivation of the domestic market of the United States and China.

 

The effects of the pandemic on the principles of supply and demand.

 

For our sector and particularly for our factory, during the pandemic a production capacity of about 31 million tons of steel was suspended and last September only 25% was restarted.

 

Steel supply shortage + demand peak (10%)

 

However, Telju Fitness guarantees the continuous delivery of its products, as it has a strong and solid position in the market.

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