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Raw material shortages and prices

Raw material shortages and prices along with increased shipping costs are effecting most if not all suppliers. The message below is from one of the largest furniture manufacturers and suppliers, TC Group and explains the reasons for the current volatility.
I hope this letter finds you in good health and enjoying the significant improvement in the weather after a very wet Spring. So much seems to have happened already in 2021 that I cannot quite believe it is June already!

As the easing of lockdown allows greater freedom of movement and a sense of normality returns, many predict a significant up tick in the economy in H2 of this year. I hope they are right but until that time I must write to you again to update you with the changes in supply routes and raw materials that are stressing our market.

After many, including us, forecasted a reduction in shipping costs post Q2 we now face a further increase well above the forecasted position. Equipment shortages & space issues have all continued and have not been helped by the Suez Canal delays. Last time I wrote to you we took a position that would soften the blow of the changes impacting your prices, unfortunately with this further increase we are unable to do so again.

shipping costs 2021Alongside shipping we continue to receive increases in raw material with changes in steel & plastic the most significant. As steel hits +200% and plastic +150% versus December rates, the impact on cost prices across a range of products is severe.

steel costsFor obvious reasons, we are now forced to revisit our approach and increase catalogue prices. The previous temporary price increase of 5% will remain and a further increase will be applied at an individual product level. The average increase is 7% however this will vary by product. At the source of this decision is the disparity between Asian and European sourced product and the related impact of shipping goods to the UK, alongside the raw material impact that differs by product.

All prices will go live for all orders placed on or after July 19th, 2021.

We also wanted to briefly update you on what is going on within our marketing department at the moment.

We just recently launched our newest Titan product, Arc. Arc has been designed for use within multiple environments and is one of a limited number of products that has been certified to both Parts 1 & 2 of the education standard BS EN 1729, specifying strength, stability, and ergonomic requirements. Arc is also 100% recyclable, fire resistant and antimicrobial. Arc will be available from August 2021.

Within the next few weeks, we will also be releasing our latest Titan Brochure and a new soft seating range.