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(Bloomberg) – Another sign of how supply chains are harassed around the world, a major U.S. stainless steel maker has been forced to report force majeure at its Kentucky plant because it cannot get enough industrial gases that it needs. And one of the reasons for this is the shortage of trucking, a problem seen in a number of industries.
North American Stainless Inc., which produces the metal that goes into everything from cookware to guitars and planes, will not be able to continue with normal smelting operations at the Ghent plant, the company said in a statement. letter to clients seen by Bloomberg. NAS, a subsidiary of Spain’s Acerinox SA, accounts for around 40% of the total stainless steel supply in the United States
Shortages of everything from containers to pallets and bottlenecks at ports have caused delays and pushed up prices for commodities and finished goods as economies recover from the pandemic. Some gas stations in parts of the United States suffered temporary shortages last month because there were not enough tanker drivers to deliver the fuel.
NAS and Acerinox did not immediately respond to email and phone requests for comment.
Logistical challenges now translate into “outright production disruptions in Acerinox’s most profitable and cash-generating division,” Morgan Stanley analysts, including Ioannis Masvoulas, said in a note. “While the profitability of the rest of the Acerinox group is expected to rebound strongly this year, any temporary production loss from the NAS division would weigh on” third quarter results, analysts said.
The company has declared a suspension of all performance obligations as well as an indefinite delay of all further deliveries to the Kentucky plant, according to the letter. NAS said in the letter that he was working to make other arrangements to meet his obligations.
(Updates with analyst commentary in fifth paragraph)
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