WoodMac’s vice president, Robin Griffin, said in a press note the drastic divergence of price and production cost could not last indefinitely, even if there were an enduring stranding of Russian production.
“A look at notional margins miners enjoy suggests that the price rises are fragile at best. Margins are way above historical norms, and such a drastic divergence of price and production cost cannot last indefinitely,” said Griffin.
“The disruption to regional and product price relationships also points to price fragility. For example, Asian steel prices remaining flat while iron ore and metallurgical coal prices continue to soar is incongruous, given their influence on steel production costs,” said Griffin.
According to WoodMac, the conflict “will undoubtedly” leave an indelible mark on some commodity markets.
“A prolonged shift in some Russian trade from Europe to China and India, and a lack of western…
