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Industry Supply-Chain Woes To Continue

shanneba

shanneba

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Fifty-one percent of the U.S. companies queried by SAP—a Germany-based firm and global leader in supply-chain software for manufacturers—said strains in the supply chain will continue into 2023.

Financial Impact
For most in the gun industry, however, it wasn’t the cost of raw material that hit bottom lines the hardest.
Hauling it to their factories, however, did.

www.americanrifleman.org

An Official Journal Of The NRA | Industry Supply-Chain Woes To Continue, Survey Says

Recent survey results indicate supply chain uncertainty, however, the firearm industry is taking a proactive approach to reduce its impact.
www.americanrifleman.org www.americanrifleman.org
 
Also, everything runs on energy & are made as byproducts of oil & natural gas. You can't run a steel mill on a windmill or solar panel, nor magically make plastics from sunlight.

Inhibiting energy production results in reoccurring transportation and other byproducts cost increases, and products in short supply.
 
Talyn said:
Also, everything runs on energy & are made as byproducts of oil & natural gas. You can't run a steel mill on a windmill or solar panel, nor magically make plastics from sunlight.

Inhibiting energy production results in reoccurring transportation and other byproducts cost increases, and products in short supply.
Click to expand...
Which is a big part of the reason that the current inflation is not limited to any one country, and isn't going to be solved by any one country. As far as domestic energy production goes, the U.S. is fine, but the rest of the world, esp. many of the places we get things from, not so much.

All the more reason to bring a lot of that manufacturing back home, if outsourcing it isn't going to offer a cost advantage anymore.
 
Talyn said:
I disagree that US domestic energy production is fine right now. It was fine 2 years ago.
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Curious why you think it isn't fine right now? We continue to produce more than we consume:

Domestic energy production has been greater than U.S. energy consumption since 2019​

In 2019, U.S. total annual energy production was greater than total annual consumption for the first time since 1957. Production also exceed consumption in 2020 and in 2021. In 2021, production equaled 97.78 quads and consumption equaled 97.33 quads.

Fossil fuels—petroleum, natural gas, and coal—accounted for about 79% of total U.S. primary energy production in 2021.

U.S. energy facts explained - consumption and production - U.S. Energy Information Administration (EIA)

U.S. energy supply by types of energy sources and energy consumption by transportation, industrial, commercial, residential, and electric power sectors.
www.eia.gov www.eia.gov
 
It's not all about gross production it's more complicated than that. If it was prices would be at the levels from 2 years ago if Fed policies had not changed.

Leases on Fed lands are at the lowest levels since 1948, Six refineries have closed in the last two years due to Fed regulations (note: no new refineries have been built since the mid-70's), Diesel & fuel oil shortages, pipelines have been cancelled, and Fed policies are telling the banks to stop/restrict loans to oil companies.

If everything was the same as two years ago then the Feds wouldn't be draining the Strategic Oil Reserve and asking foreign companies to increase exports to the US.

On the production side there are various types of oil. The high "shale" oil production has a problem with refining. Few US refineries are set up to refine shale-derived oil.

www.cnbc.com

Shale oil has a refining problem, and Morgan Stanley thinks investors can profit

=U.S. oil may soon struggle to find a a home in refineries. Morgan Stanley believes that could create opportunities.
www.cnbc.com www.cnbc.com

Overall production may be up but if processing is limited then overall supply is lower due to the factors listed above.

Oil companies export the excess shale oil = higher profits due to world prices, but US refining capacity has decreased resulting a lower supply of refined products.

While prices have come down from peaks due to various factors the factors above have prices higher than two years ago. Many factors involved = cumulative effects.
 
Talyn said:
It's not all about gross production it's more complicated than that. If it was prices would be at the levels from 2 years ago if Fed policies had not changed.

Leases on Fed lands are at the lowest levels since 1948, Six refineries have closed in the last two years due to Fed regulations (note: no new refineries have been built since the mid-70's), Diesel & fuel oil shortages, pipelines have been cancelled, and Fed policies are telling the banks to stop/restrict loans to oil companies.

If everything was the same as two years ago then the Feds wouldn't be draining the Strategic Oil Reserve and asking foreign companies to increase exports to the US.

On the production side there are various types of oil. The high "shale" oil production has a problem with refining. Few US refineries are set up to refine shale-derived oil.

www.cnbc.com

Shale oil has a refining problem, and Morgan Stanley thinks investors can profit

=U.S. oil may soon struggle to find a a home in refineries. Morgan Stanley believes that could create opportunities.
www.cnbc.com www.cnbc.com

Overall production may be up but if processing is limited then overall supply is lower due to the factors listed above.

Oil companies export the excess shale oil = higher profits due to world prices, but US refining capacity has decreased resulting a lower supply of refined products.

While prices have come down from peaks due to various factors the factors above have prices higher than two years ago. Many factors involved = cumulative effects.
Click to expand...
Great points, and yeah, I didn't mean to imply that it's all rosy, by any means. But I guess I'm optimistic that, given a variety of global events that are unfolding these days, we'll see refining capacity in the U.S. increase. Though it will probably take a change in leadership, along with a recognition that we are a long way off from the delusional thinking that renewables will soon be a large part of the picture. I think it will become increasingly clear that, regardless of ideology and "green" rhetoric, we aren't going to have much of a choice but to increase refining capacity for the foreseeable future. Along with that, we also need to restore some investor confidence.
 
Talyn said:
The best oil...

Oil Types
Click to expand...
AND yes due to varying types of crude some are higher than others. Example, in the Permian Basin area of Texas it is 1 if not the best in the US as far as grade. Requires less refining. Refineries closing due to government requirements were more about "jumping ship" and abandoning for MORE money as they are on the best side of the dollar! Excuses are not reason s for current fuel prices as those on the better side of the dollar will have it. When wheat prices went up in the '70s, bread did to. Wheat went down, bread went up again. Crude prices from $150+/barrel, prices of fuel went crazy high. Crude went down under $50, but fuel didn't reach 1/3 of cost. Government said "no gouging was happening" from their conclusion. Seriously? Remember what happened when 1 of only 2 antifreeze plants blew up? Prices were 5x or more. Not sure if the other got rebuilt? To makes things worse on fuel (really about quality) is most is transferred underground to a receiving/distribution facility. In doing so it collects water thru condensation and corn syrup (basically) added. With that (corn) has many producers selling to fuel manufacturing plants causing human and animal consumption prices ridiculous! Regardless of who in in the WH each tries to irritate the other side and reverse others accomplishments good or bad. Some try and make it worse just because. Fueled by hatred and ill-informed (some intentional) for their "it's in the best interest" of the country.
 
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