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But there have been no changes to the fundamentals of steel or oil supply, we're still digging both out of the ground and refining them. The issue is thus in t
by dustintrex 5y ago
But there have been no changes to the fundamentals of steel or oil supply, we're still digging both out of the ground and refining them.
The issue is thus in the supply chain, and this is having unpredictable second-order impacts on the primary supply as well: iron ore production will dip if you can't get a replacement tire for your giant dump truck, because the tire is waiting for a container ship in Shenzhen.
- trhway 5y ago>there have been no changes to the fundamentals of steel or oil supply exactly. All while we've printed extra $10T in a span of less than 2 years. Those trillions like water are finding their way to swamp the economy. >The issue is thus in the supply chain While the supply chain did initially get damaged by the anti-pandemic measures, a spiraling inflation is known to cause supply chain issues too.
- aeternum 5y agoInflation expectations can also cause shortages, that seems like a pretty significant problem here. Suppliers will sell only as much steel as they absolutely need to to pay immediate expenses if they expect the price of steel will be higher next week. I suspect that's what some of these 'shortages' actually are. Astute business people that are simply waiting longer than usual to part with their product because the price keeps going up.
- dustintrex 5y agoThat's a mighty risky game though. If you were getting $1 per widget last year, and can sell them for $2 now, most suppliers will be more than happy to sell at $2 instead of holding out for $3 and risking $1 or $0.50.
- imtringued 5y agoEveryone did that and then the lumber price crashed.