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null Commodity Prices Skyrocket… Dangerous or Transitory?

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Commodity Prices Skyrocket… Dangerous or Transitory?
04 Jun 2021
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Clock 40 mins.
CATEGORIES: AER Premium AER Personal Macro Global Commodities
ANALYSTS:
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Ignacio de la Torre
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Leopoldo Torralba
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Pedro Larrasquitu
At the onset of the COVID-19 pandemic, commodities prices plunged as markets discounted a historical recession. Then, the positive evolution of the industrial sector during lockdowns and the rapid Chinese rebound pushed the prices of commodities including copper and lumber to all-time highs. Now, the question is whether these increases will be sustained over time, with the subsequent long-term adverse impacts on the economy, or whether it is just the result of transitory, pandemic-related events. In order to answer this question, we must first reflect on the following:
dot What has been the effect of freight costs on commodities? Is this a recurring factor?
dot What is the likely evolution of China moving forward?
dot Will the consumption of services rise to the detriment of goods?
dot What may be the impact of inflation expectations?

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