EP Monthly - Oct 2021

For this year, a GDP growth of around 6% is expected1 in the United States, +8% in China, 6.8% in the UK, and + 5% for the Eurozone, lifting total GDP in these countries above pre-pandemic levels. This strong recovery in the global economy is accompanied by a significant increase in most raw material prices, particularly energy. The price of a barrel of Brent-type crude has risen more than 50% this year so far, standing at the beginning of 4Q21 above the $80 mark as a result of the OPEC+ refusal to ramp up production in order to meet increasing demand. Natural gas prices are spiking, partly because levels of gas storage are well below their historical average for this time of year, but also due to geopolitics. On the other hand, and still as a consequence of the ruptures in the production processes due to the pandemic and the sudden recovery of private demand, significant and widespread supply chain difficulties lurk around in different industries. This situation is well depicted by the long queues of vessels in key ports in the US and Europe waiting to berth and unload in a context where the shipping cost of a 40-foot container between China and the US East Coast has more than quintupled over the last 12 months, causing serious imbalances to certain goods supplies ahead of the shopping season in the US and Europe....

Global Market View - October 2021

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