Supply concerns spark extreme market volatility in commodity markets(4)

Oliver Allen, a market economist at Capital Economics, said that oil and gas prices will depend on the progress of the Russian-Ukrainian conflict and the extent of the rupture in Russia's economic relations with the West. If there is a long-term conflict that severely disrupts Russian and Ukrainian exports, oil and gas prices may increase. stay high for a long time.

Rising commodity prices boost global inflation

In addition to nickel and oil and gas, other base metals, gold, agricultural commodities and other commodities prices have also experienced sharp rises recently. Analysts said the rise in commodity prices, mainly due to the conflict in Russia and Ukraine, major exporters of energy and agricultural products, would push up production and living costs broadly.

Deutsche Bank analyst Jim Reid said this week has the potential to be "the most volatile week on record" for commodities as a whole, with an impact that could be similar to the energy crisis of the 1970s, heightening inflation risks .

Mike Hawes, chief executive of the UK's Association of Motor Manufacturers and Traders, said Russia and Ukraine provide key raw materials for the European car supply chain, including nickel used in battery manufacturing. Rising metal prices pose further risks to global supply chains already suffering from inflationary pressures and parts shortages.

John Wayne-Evans, head of investment strategy at Investec Wealth Investments, said the impact of the conflict on the economy would be transmitted through rising commodity prices, with a focus on natural gas, oil and food. "Central banks now face a bigger test, especially as commodity shortages fuel inflationary pressures."