Steel shot shortage as China shuts down factories, more market shocks to follow as Government clampdown on pollution takes bite.
A shortage in steel shot could be the tip of the iceberg as the reality of China’s clampdown on pollution takes effect.
And with the stark reality that nobody knows how long factories will be shut down means price increases are highly likely across almost everything coming out of China.
T&G was alerted to the situation by Francesco Spilotros of Clever, Srl: “All the factories have been closed down by Chinese Government due to environmental regulations, in the attempt to solve the pollution issue, and we don’t know when they will be able to restart. This is causing a lack of steel shot on the market, and a big rise in price.” And inevitably he continued: "For this reason, we are obliged to adjust our prices to new Steel Shot quotations received.” Stephen Dales, owner of the Steel Shot Company, a leading supplier of steel shot to Europe, has confirmed the situation: “There is a supply glitch and it’s unfortunate that it has started right at the start of the game season.
However, we do have supply and we are fulfilling orders, albeit with a limited supply at the moment.
“I am told by our suppliers that this is a temporary situation. The factories have been shut down while they are audited by the Government. At this very moment I am awaiting news myself as to when they will reopen.” T&G spoke to a high profile agent in China, who for obvious reasons does not want to be identified.
He told us: “The Government is clamping down on pollution and really it has no choice. Some of the cities are so bad that people really cannot be expected to live there.
“What they seem to be doing is descending on a region and shutting all factories down. They are then audited and if they pass, then they can re-open.
“Ultimately, it looks like the Government wants to create industrial zones and all manufacturing will be moved to those. They are being pretty ruthless about this, and factories cannot re-open until they have cleaned up their act.
“Anything to do with steel, anodising, dying, metal production and electronics is very heavily affected and there will be major supply shocks in months to come – which inevitably leads to increases in price.”