Germany urgently seeks new raw material suppliers
Germany urgently seeks new raw material suppliers

27 October 2022 – German companies are urgently looking for new suppliers of raw materials and intermediate products to reduce their dependence on China and Russia. China is importing more stainless steel again. And good economic data from Japan and Mexico.

Germany: New raw material suppliers urgently sought

Since the outbreak of the Russia-Ukraine conflict, companies from Germany have been frantically searching for new suppliers. This is because the dependence on raw material imports is particularly high in Germany as an industrialised country, and not only for energy sources such as gas and oil. Processing is also particularly affected, because according to the German Raw Materials Agency (DERA), 50% of global refined sugar production currently comes from China.

Reinventing supply chains

That is why companies in Germany are now radically reorienting. The main driver is fear of dependence on states like Russia and China. Reducing the dependence on China for raw materials is a real feat, as the Federation of German Industries (BDI) recently announced.

Large German corporations, such as the Volkswagen Group, have already begun to hurriedly set up new departments for securing raw materials.

High hurdles for small and medium-sized enterprises?

What can be easily priced in by large corporations is often not so easy for small and medium-sized enterprises to implement in their own operations without immense expense. In addition, there is often a lack of suitable know-how and knowledge in the company.

In addition, there are other hurdles, such as market protection measures or the planned EU Forced Labour Prevention Regulation, which will bring new restrictions, especially against China. But existing and forthcoming sanctions against Russia and Iran also bring uncertainties.

Sourcing: effective solutions needed for small and medium-sized companies

But there are solutions for small and medium-sized enterprises in Germany and Europe, which form the backbone of the EU economy. And this does not require expensive investments. Diversifying one’s own purchasing and looking beyond China is the easiest and most cost-effective way to do this. How can this be done? Just ask us.

China’s stainless steel imports rise

China imported significantly more stainless steel in September. Imports of flat-rolled stainless steel rose by 12.7% year-on-year (YoY). Analysts expect a further increase in imports to China in October as well. This points to a further recovery in the Chinese market.

Good data from Mexico and Japan

Japan’s services sector rose sharply by 0.8 points to 53 in October, likely due to the country’s reopening to foreign tourists and nationwide travel discount programmes for Japanese.

And according to recently published data, Mexico’s economy developed much more buoyantly in August than had been expected. The gross domestic product increased by 5.7%, which can be attributed in particular to the manufacturing sector. The manufacturing sector had shown convincing growth of 8.1%. However, the Mexican service sector also grew rapidly by 6.6%.

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