With the arrival of the pandemic in 2020, there was a huge halt in the manufacture of all kinds of products. Many companies closed down and demand fell to a record low, so consumption of raw materials was drastically reduced.
However, with the end of confinement, demand suddenly picked up again. But there were many companies that were still not producing at 100%. On top of this, we have to add that in the East, activity was reactivated much earlier, so many companies started to demand a lot of raw materials in Europe, which they paid for at any price.
All of this has led to a situation in which demand has grown so much that it cannot be met with the current supply and, as a result, prices have risen in an “unusual” way.
On the other hand, the price trend has been and is upward throughout 2021. Ocean freight rates are at record highs and transits are getting longer and longer, with the result that goods are not arriving in time to meet growing demand. And the price of publicly traded metals have also reached record highs this year.
How has this situation affected Menage Confort?
During the time we have been at home without being able to go out, we have realised that we had many shortcomings that we needed to rectify but that we had never prioritised. And of course, as leisure and travel are now restricted, we have saved a bit of money, and many of us have decided to spend it on these renovations.
This has meant that the price of our raw materials (sheet metal, steel, copper, resins, paint, plastic, aluminium…) has increased by around 30 to 40%.
To give you an idea, a bottle rack, for example, uses sheet metal in the guides, steel in the fittings, plastic in the fastening and fixing parts and resin or paint in the coating.
On the other hand, so far this year, there have been three increases in the price of paper. This has caused the price of our packaging boxes to rise by 13-15%.
Wood is also skyrocketing and we have a complete collection with melamine.
As a result, our manufacturing and packaging costs for each product have risen sharply.
How does this situation affect Menage Confort customers?
Well, that’s logical. If the cost of materials increases and therefore affects our manufacturing and packaging costs, we have no choice but to raise our prices to be able to cope with it.
This is something we are seeing throughout the sector. It is a cyclical situation, which has happened to all of us. We have no choice.
What are the prospects for the future?
For now, the future is full of uncertainty.
Some gurus predict that prices will stabilise in the second half of the year. Others, on the other hand, estimate that there will still be increases until the beginning of 2022.
We already have news of further increases at the beginning of July this year. So we cannot venture to give a forecast of how things will be in the near future.
What I can tell you is that at Menage Confort, we are closely monitoring this situation and looking for new suppliers that will enable us to control costs.