The Asahi Shimbun and other media outlets have reported that domestic automakers have cut production of more than 1.7 million vehicles due to shortages of semiconductors, wire harnesses, and other components. The fragility of the supply chain, which relies on overseas sources, has been exposed.
The production cutback due to this shortage has also reduced the domestic demand for materials and parts for automobiles. Demand for steel, aluminum, copper, lead, precious metals used in catalysts, and platinum have also been affected. Rhodium, which hit a record high of $30,000 this year, has been the most notably affected. More than 80% of rhodium demand is for use in autocatalysts, but the price had fallen significantly since last month when it became clear that auto production would be cut and is now down to $14,000 per troy ounce.
Rhodium Market Price (USD/oz)
So far, we have not seen the exact same negative impact as rhodium on steel and aluminum. However, if the auto production cutbacks continue until November, the current tight situation will ease. Steelmakers are likely to have mixed feelings about this. While a drop in demand for steel due to production cuts would harm their business, they may also be relieved because they face a critical shortage of ferrosilicon and other secondary materials.
The ferrosilicon price, which is now in a different dimension, has risen to a record high of $4,000, an unimaginable increase of nearly $1,500 in one week.
Ferrosilicon Market Price (USD/ton)
Metal Silicon 441 Market Price (USD/ton)
It is said that the abnormally high price of ferrosilicon will continue until the end of this year or even until April next year. How high can it go? And when will the actual supply be available? Ferrosilicon is now in the unknown realm of only God knows what.
When the price of ferrosilicon started to rise in April, we said, the production would eventually decrease due to a shortage of raw materials. Just as the automobile industry had to cut production due to a shortage of parts, steel, stainless steel, and aluminum industries are also facing the possibility of unavoidable production cuts due to a shortage of raw materials.
Non-delivery of ferrosilicon from China has already begun, which is likely to spread further in the future. If metal silicon is not available, the production of aluminum alloys and other products will also reduce.
Considering China's schedule and the ongoing severe power and production restrictions, we should be prepared to assume that the actual products will not be available. Is China, who is desperate to decarbonize, trying to neutralize its opponents by cutting off global supply? However, if we say that it is all for the sake of the environment, it is a perfect justification. It might be partially true that the CO2 reduction target would not be achieved unless we go this way.
In the past, when the price of ferrosilicon skyrocketed in 2008, the market was calmed down by the roundabout trade from Vietnam. This time, however, even production is not available and there is no physical product. This is a crucial difference between then and now.
The possibility of steel production cuts due to a shortage of ferrosilicon is becoming a reality. At the same time, aluminum alloy production will probably be cut due to a shortage of metal silicon.
（IRuniverse/MIRUcom Translated by Y. Yamamoto）
→（Original Article）部品、素材、原料不足による減産がさらに広がる？
