RAW MATERIALS CONTINUE RALLY AGAINST CONCERNS OF DEFICIENCIES
Raw materials continue to rise rapidly as Russia's invasion of Ukraine shakes world markets and raises fears of supply shortages, according to Bloomberg.
Commodity prices from oil to aluminum and wheat are rising, preparing to mark the strongest weekly growth since 1974 and the days of the oil crisis.
Russia's growing isolation is suffocating a leading source of energy, metals and grain, raising fears of prolonged shortages and sharper global inflation. Traders, banks and shipowners are increasingly avoiding doing business with Russia due to difficulties in securing payments, and logistics companies are canceling or not making reservations in the region.
The International Energy Agency (IEA) has warned that global energy security is under threat and the planned release of oil reserves for emergencies from the United States and other leading economies has failed to allay supply concerns. JPMorgan Chase & Co. announced that the global benchmark Brent could reach $ 185 a barrel by the end of the year if disruptions in Russian supplies continue. Prices reach about $ 112 a barrel on Friday.
Wheat has risen to its highest level since 2008 amid growing fears of a global shortage after the war in Ukraine cut off about a quarter of the world's exports of basic products used for everything from bread to biscuits and noodles. Futures jumped the limit on the stock exchange in Chicago - by 6.6% to $ 12.09 per bushel (35 liters).
Base metals also continued their rally after the LMEX Metals index, which tracks six major contracts, broke a record on Thursday. Rising energy prices have boosted momentum, raising costs. Aluminum rose 3.6 percent to $ 3,850 a tonne on the London Stock Exchange, a new record. Copper is also approaching a record high.
Higher commodity prices have the potential to slow growth and cause inflation, creating a dilemma for central bankers around the world as they assess the need to increase borrowing costs against the risk of slowing economic growth.
