The impact of the war in Ukraine on commodity prices continues to be intense and widespread. European natural gas is one of the raw materials that shows the highest increase in prices since pre-Covid (+ 740% on April 19) and this increase is explained for about a fifth by the increases recorded after the outbreak of the conflict.
The fluctuations in gas prices
Gas prices continue to be characterized by intense fluctuations: after the peak at the beginning of March, when it touched 220 euros per MWh, the price is now at 94 euros per MWh (as of April 19), in any case above the levels recorded before. the outbreak of the war in Ukraine (76 euros per MWh on average for the first three weeks of February).
The priority is to ensure the productivity of businesses
“It is an unprecedented emergency: the increases are heavily eroding the margins of companies, to the point that there is a risk of a reduction in the production of many manufacturing companies, one in 4 if the conflict lasts beyond the next 3 months, commented Alberto Dossi, Deputy Vice President of Assolombarda -. The priority now is to mitigate the impacts of rising prices to ensure the continuity of production of companies. However, we must not lose sight of the long-term objective, which must be to favor an energy policy based on a balanced development without prejudice to the various technologies and sustainable energy sources.
Reduce energy dependence
Development that reduces energy dependence on politically unstable countries such as Russia as much as possible ». The increases in European gas prices push up the price of electricity in Italy, which is + 393% above the pre-Covid level (19 April), aggravating the tensions already existing before the conflict, when the PUN (Single National Price for electricity ) showed an increase of + 333% compared to January 2020. There are several raw materials whose prices are heavily affected by the conflict.
Raw materials affected by the conflict
In particular, the effects are substantial for the price of wheat, the increase of which since pre-Covid (+ 98% on 19/04) is explained for almost two thirds by the increases recorded after the start of the war. The increases in nickel and zinc prices (+ 154% and + 96% since pre-Covid) are also attributable for about half to the post-conflict period. For sunflower oil, steel, corn and oil, 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 a barrel. Another important increase is that of urea and ammonium nitrate fertilizer, whose price is now + 388% above January 2020, also in this case with an acceleration after the start of the war.