Last weeks’ VALE dam disaster in Brazil, the second in a short space of time, is resulting in serious effects on the worldwide supply of raw materials, particularly iron ore, and Nickel.
Following the disaster, we understand that the Brazilian government has demanded a Health & Safety Audit be carried out on all dams in Brazil of similar construction, which are numerous.
As VALE reportedly produces and supplies around 20% of the worlds iron ore, and 50% of the EU market for the product, this is resulting in a rapid escalation of iron ore and scrap prices.
As a direct result of this, we are already seeing immediate finished product price increases from producing mills, with British Steel, Arcelor Mittal and Liberty Merchant Bar all announcing increases of 5 – 7 % in the last few days.
As this supply chain disruption is expected to last a minimum of 9 months, we believe that this is just the beginning of a prolonged period of price increases.
As such, we will be increasing our prices with immediate effect, in line with these market movements.
Kloeckner Metals UK