Concerns as to Japans ability to continue supplies

Monday, 4 April 2011 08:10

Following the devastating tsunami, there are concerns both domestically and internationally regarding Japans ability to continue supplies of everything from motor vehicles to chemicals. Japan has considerable electronics industry that supplies global markets. Various report over the last week have called the current disruption "the most significant supply chain impact the consumer electronics industry has ever experienced".

Disruptions to their production could cause shortages and price spikes for products such as memory chips and liquid-crystal-display panels. Along with plant damages, the main issue in Japan remains power outages, which prevent factories from becoming fully operational. Japan accounts for almost 60%+ of the world’s supply of silicon wafers and memory for electronic devices will also be disrupted.

On the motor vehicle side numerous domestic factories have had to close due to domestic supply issues and as mentioned above power issues and overseas plants have been forced to take up the production shortfalls which will be difficult to "get up to speed" in the current global downturn and so there probably will be a considerable lag in some sectors.

On the commodity side, scrap metal exports have been hit as China has indicated that there are concerns with material be contaminated with radioactive isotopes, China is one of the biggest Japanese scrap buyers and this will affect the market considerably.