Chemicals Newsletter, August 2022
The current global supply chain crisis has made us all painfully aware of the sophistication and the fragility of manufacturing models. European market sentiment, as measured by national confidence indices, has softened markedly as lean manufacturing sectors such as automotive have struggled to adapt to the shortfall in semiconductors and battery components related to the impact of the tail of Covid in Asia, while energy-intensive manufacturing industries have been hit by the rising energy and fuel prices caused by the war in Ukraine. The subsequent rises in inflation have put pressure on margins.
Higher import costs have, however, increased the tailwind for fully or partly reshoring some critical supply chains in Europe. Certain raw materials, as mined materials, cannot be easily separated from their source geography, but a greater proportion of the processing can be, and this has seen increased focus on the chemicals and materials sector.
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