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Sunday, 19 September 2021

Shipping is doing its bit to force up inflation globally

A covid-induced surge in shipping costs is the latest flashpoint for inflation: With an increase in gas prices, a shortage of truck drivers, and a dearth of shipping containers, elevated freight costs globally are expected to continue into 2023, translating into higher price tags for everyday products, the Wall Street Journal reports. Spot container rates for Asia to US West Coast shipping increased fivefold y-o-y in early September compared to 2020, and were 14 times higher than in 2019. End consumers can expect these higher transport costs to trickle down to the final product prices, further driving up inflation. One Moody’s analyst suggested that transport costs could be responsible for as much as 10% of price inflation over the past year.

A commodities supercycle? Tell that to iron ore, which has just suffered its worst week since the global financial crisis, according to the Financial Times. Prices were down 22% last week to USD 100.80 per tonne, continuing its spectacular fall from its record highs of more than USD 230 in May. What’s to blame? Mainly Chinese curbs on steel production, analysts say.

Down

EGX30

10,997

-1.4% (YTD: +1.4%)

None

USD (CBE)

Buy 15.66

Sell 15.76

None

USD at CIB

Buy 15.66

Sell 15.76

None

Interest rates CBE

8.25% deposit

9.25% lending

Up

Tadawul

11,422

+0.1% (YTD: +31.5%)

Up

ADX

7,883

+0.8% (YTD: +56.3%)

Up

DFM

2,901

+0.6% (YTD: +16.4%)

Down

S&P 500

4,432

-0.9% (YTD: +18.0%)

Down

FTSE 100

6,963

-0.9% (YTD: +7.8%)

Down

Brent crude

USD 75.34

-0.4%

Down

Natural gas (Nymex)

USD 5.11

-4.3%

Down

Gold

USD 1,751.40

-0.3%

Up

BTC

USD 47,987

+1.7% (as of midnight)

THE CLOSING BELL-

The EGX30 fell 1.4% at Thursday’s close on turnover of EGP 1.94 bn (20.1% above the 90-day average). Foreign investors were net sellers. The index is up 1.4% YTD.

In the green: Speed Medical (+5.7%), Ezz Steel (+2.2%) and Raya Holding (+2.1%).

In the red: TMG Holding (-4.2%), AMOC (-4.1%) and Ibnsina Pharma (-3.7%).

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2021 Enterprise Ventures LLC.

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