From S&P Global Platts:
Topping our charts to watch this week is the price of nickel at the London Metals Exchange, after a surge above $100,000/mt last week prompted a trading suspension. Our editors are also looking at the impact of the Russia-Ukraine conflict on implied inflation as well as methanol prices, and US gasoline demand as workers start returning to offices.
....2. Russia-Ukraine conflict may have ramifications on long-term inflation prospects
What's happening? Implied inflation and commodities began their recovery from the deflationary impacts of coronavirus back in spring 2020. Until recently, the recovery in both has been somewhat irregular, but steady and more or less coincident. However, both implied inflation and commodities have spiked sharply in the wake of the Russia-Ukraine conflict. Many countries are now assessing their vulnerability to key inputs to their economies, both from a security of supply and price standpoint
What's next? Near-term prospects for implied inflation on a five-year basis have risen from about 2.75% leading up to the conflict to near 3.5% most recently, but the 20-year assessment has risen from 2.4% to near 3%. This is significant, both in the rise and what it may portend. Countries may now opt to address their vulnerability by sourcing locally, but at a higher price. In fact, the rise in longer-term implied inflation may be signaling a paradigm shift in how economies address the sourcing of key inputs and the higher prices that may be necessary to close reduce those vulnerabilities.....
....MUCH MORE
