It’s not just gas. Metal prices are also rising, which will affect many consumer products

The war in Ukraine is having a more direct impact on Americans in the form of higher gasoline prices as the cost of oil continues to soar.

But look a little further and the situation gets even worse.

Russia is a key global supplier of a variety of metals used in manufacturing – aluminum, nickel, palladium. These metals are now rare and the prices of many consumer goods will reflect higher production costs.

The price of nickel on the London Metal Exchange soared more than 60% on Monday.

Nickel is used to make stainless steel, lithium-ion batteries and other products. That means the cost of everything from cookware to consumer electronics could be about to soar.

“Commodity markets are increasingly pricing in a scenario in which a significant portion of Russian supply will be shut out of the market,” Morgan Stanley said in a note to clients.

“Prices are likely to remain very volatile, until the true impact on supply becomes clearer and prices can begin to settle at a new equilibrium.”

Record aluminum prices have already contributed to higher canned prices. Copper is also at record highs.

Rising costs illustrate the realities of global supply chains and the interdependent nature of manufacturing. Higher expenditures on one component of a product can drive up overall prices.

“Already tight markets could face even greater shortages if Russian exports of mining commodities were to be significantly affected,” Morgan Stanley said.

“In a generally low inventory environment, demand destruction would become necessary in such a scenario.”

It’s a fancy way of saying that manufacturers may need to find alternate supplies on an ongoing basis.

Conclusion: From an economic perspective, war is now more expensive than ever after decades of peaceful manufacturing integration.

This means that you will feel the effects of hostilities no matter where you live.

About Anne Wurtsbach

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