The impact of the war in Ukraine on commodity prices continues to be intense, outlining a worrying picture. The numbers provided by Assolombarda speak for themselves: increases in all sectors, with European natural gas driving the group. If they continue on this path, there is "fear of the risk of a reduction in the production of many manufacturing companies, one in 4 if the conflict lasts beyond the next 3 months”. These are the words of Alberto Dossi, vice president of Assolombarda. “The priority now – says Dossi – is to mitigate the impacts of the price increase to guarantee the productive continuity of the companies. However, we must not lose sight of the long-term objective, which must be that of promoting an energy policy based on the balanced and unbiased development of the various technologies and sustainable energy sources. Development that reduces energy dependence on politically unstable countries such as Russia as much as possible”.
Manufacturing companies at risk from raw material price increases
In detail, European natural gas is among the raw materials that show the highest increase in prices since pre-Covid (+740% on 19 April) and about a fifth of this increase is explained by the increases recorded after the outbreak of the war. Gas prices continue to be characterized by intense fluctuations: after the peak at the beginning of March, when it came close to 220 euros per MWh, the price is now at 94 euros per MWh (again as of 19 April), in any case above the levels recorded before the outbreak of war in Ukraine (76 euros per MWh on average for the first three weeks of February).
The increases in European gas prices push up the price of electricity in Italy, which is above the pre-Covid rate by +393% (April 19), aggravating the tensions that already existed before the conflict, when the PUN (Single National Electricity Price ) showed an increase of +333% compared to January 2020.
There are several raw materials whose prices are heavily affected by the conflict. In particular, the effects are substantial for the price of wheat, whose increase since pre-Covid (+98% on 19/04) is explained for almost two thirds by the increases recorded after the start of the war. Even the price increases of nickel e Zinc (+154% and +96% since pre-Covid) about half of them can be attributed to the post-conflict period. For sunflower oil, steel, closest e Petroleum the war accounts for almost half of the increases compared to pre-Covid: +151% sunflower oil compared to before the pandemic, +217% steel, +113% corn, +72% Brent oil, which stands above 100 dollars per barrel. Another important rise is that of urea fertilizer e ammonium nitrate, whose price is today +388% above January 2020, also in this case with an acceleration after the start of the conflict.
