The car is packed. The trip to the beach is planned. The forecast was for clearing skies, but there’s rain on the windshield and gray skies up ahead. Why can’t they just predict the weather more accurately?
Rainstorms and Supply Chains
When ElastaPro first reported about silicone shortages in our March 2021 newsletter, we’d hoped that silicone rubber supply would stabilize during Q3 2021. As with so many forecasts, however, our prediction missed the mark – and the rain continues.
By now, we’ve all heard reports about how major silicone suppliers have put customers on allocation or become super-selective about taking on new business. There’s news about rising prices and longer lead times, too.
With the way things are looking, this “storm” will probably last until early 2022. So, what’s the latest version of the big picture, and what can we learn from the revised forecast?
What’s Behind the Bad Weather?
For starters, it’s important to understand that the current crisis is global in nature – and rather different than the supply shortage of 2018. Back then, the key factor was a shortage in Polydimethylsiloxane (PDMS) – the basic building block of silicone products. This was a result of some of these PDMS plants being taken offline due to maintenance or environmental concerns (primarily affecting the Chinese producers of PDMS). What’s changed in 2021 is less of an issue with PDMS and more in terms of people and ancillary products to convert the PDMS into elastomers and other key silicone products we all use. The Major Producers continue to struggle with catching up on their backlogs due to staffing, logistics, or shortages of ancillary and supporting products.
Additionally, one of China’s largest basic suppliers of silicon metal and downstream silicone products is banned from selling into the U.S. and the EU. Even if you don’t buy directly from this company, you possibly use its intermediates in products that you purchase from other suppliers. Again, this is making things tough.
Weathering the Storm with You
ElastaPro continues to work aggressively to assure the continued supply of silicone elastomers and ancillary products to our customers. We’re also doing all we can to reduce the costs in our processes so that we can offset rapidly increasing prices for raw materials.
Although we’ve had to increase our prices, the percentage of these increases has been well below what we are seeing in our raw materials. Moreover, we continue to maintain a two-week lead time on most made-to-order products. We’re also continuing to stock key silicone sheet materials for quick one-day turnarounds.
Look to the Long-Term Forecast
Our commitment to service goes well beyond wanting to provide you, our customer and partner, with the best quality and value in silicone sheeting and silicone compounds. We are also ensuring that we are doing all that we can to maintain a viable supply chain with quick turnaround times to provide the very best service to you.
We’ll get through this together – and sooner than later, we hope. It might not seem like it now, but sometimes storm leave behind rainbows.
Thank you for your continued support.