Industry faces shortage of raw materials

 In Exports, Industry, News

A scarcity of raw materials and at a higher cost is causing problems for Portuguese industry, from metallurgic and real estate to textiles and footwear sectors.

And maritime freight shipping costs have also risen and are seriously restricting industrial output which cannot fulfil growing order books with the sector already admitting that it may have to lay off workers.
This is according to the conclusions of a monthly survey for June carried out by the Enterprise Association of Portugal (AEP) which canvassed 300 members to gauge “the main stumbling blocks to the recovery of company activity”.
A lack of raw materials and intermediate products, and interruptions in commercial trading routes because of a lack of shipping containers are the “new constraints” Portuguese companies say hamper their activities, as well as in organising workforces and schedules in the “new post-pandemic reality”.
“The issue of a huge increase in the cost of raw materials and transport is beginning to weigh heavily on industry,” says the vice-president of the Association of Metallurgic, Metal-mechanics and Allied Industries of Portugal (AIMMAP), Rafael Campos Pereira, who in some cases points to a quadrupling of costs in maritime shipping and increases of 50% and even 100% or more on the cost of raw materials.
According to Rafael Campos Pereira, these two factors “are linked because a large part of raw materials (for the sector) come from outside of the European Union”, via sea and “there aren’t enough containers and the price of those that there are is extremely high”.
The result is that it impacts both the purchase of raw materials as well as components and exports of finished goods”, he explains.
“This is because China and the Far East, namely Korea, saw a return to economic activity before Europe in 2020 (with the recovery after the first wave of the pandemic), which resulted in all the containers being rerouted to Pacific shipping routes”, explained Campos Pereira.