Commodity prices soar as world digests ripples of war

Commodity prices have risen sharply as the world digests the economic shock of the war waged by Russia on Ukraine, with some commonly used materials in the bike world up by a quarter of more in the past month.

Aluminum is among the top risers over the past week, moving up in price by more than 20% to reach 4053.00 this morning, up 5.3% today alone. Meanwhile, steel is a much slower riser, but moving north nonetheless at 7.5% in the past week and 8.19% in the past year.

Most notably the press at large is focused on the surging oil price, which will add further cost to both the logistics of moving and manufacturing many items. The Oil price as of this morning is hovering close to all time highs, with many analysts pointing to further rises to come. Currently the price is sat at around $139, with the rise pinned to ongoing talks in the United States and Europe to ban the import of Russian oil in a bid to dilute the nation’s primary income source.

Battery metals are aversely affected too, with Nickel up 25% in a month, cobalt up 6.7% and lithium up 29% in the same time frame. Year on year the lithium price is up 600% and the Nickel price 80.6%.

Rubber is one area where the bike industry can at least rest easy for now with the supply less affected thanks to much of the world’s raw material stemming from Brazil, Thailand and Indonesia, among other destinations far from the conflict. The rubber price is down 8% year-on-year, but up 4.4% in the past month.

The commodity price increases are bound to remain at elevated levels for the foreseeable future while Russia maintains its unpredictable path. Ukraine is Europe’s largest sources of rare earth materials and a major exporter of steel, iron and other mining products and, significantly to food prices, agricultural goods too.

Russia is major producer of cobalt, nickel, platinum, vanadium, copper, gold and many other raw materials.

Running in tandem with increases in commodity prices, shipping costs have plateaued at just shy of $10,000 for a 40ft container according to the World Container Index. The composite index is around 80% higher year-on-year.

Just prior to the escalation of conflict shipping giant Maersk had forecast supply chain’s making an improvement by the end of 2022.