We resume and share an article taken from “THE AMMONITOR.“
We have learned in recent years that the globalization of markets has produced many effects on the economies of countries around the world.
The main beneficiaries of globalization are certainly consumers, who can count on a wider choice due to a greater range of products and services. Although the problems that have come about as a result of this phenomenon, which encapsulates the concept of internationalization, have been, if not solved, at least partially metabolized by the various world economies, this does not detract from the fact that even today it is still difficult to be able to react in a timely manner to the effects caused by unpredictable strategies adopted by countries perhaps thousands of kilometers away, as we are taught about the ’butterfly effect”: a flap of a butterfly's wings can cause a hurricane on the other side of the world.
The hurricane in question is the difficulty in sourcing raw materials and the very high price of available ones-a phenomenon that is putting Italian manufacturing companies in serious difficulty.
But what lies behind this event that threatens to slow the recovery? The acceleration toward exiting the U.S. and China's pandemic has put the respective economies of these countries, which attract most of the supply at this time, back on track sooner than expected.
Growing demand and likely speculative maneuvers are thus leading to an increase, described by many experts as disproportionate, in commodities.
This situation, which was already emerging at the beginning of the year, is in danger of becoming even more critical as the world's major economies, including Italy's, feel the need to restart momentum. Soaring prices lead to an inevitable increase in production costs that companies, in a fragile consumption environment like the current one, cannot even partially pass on to selling prices.
The problem cuts across all manufacturing sectors for which they complain of supply difficulties in steel, copper, aluminum, polymers, semiconductors and components.
The rise of steel, which has reached price increases of 100% since last summer, opens an open wound for Italy.
Written by Fabio Chiavieri
