According to data provided by Germany’s Hamburg Institute of International Economics (HWWI, Hamburg; www.hwwi-rohindex.de), the commodity price index for September 2021 rose 8.8% against the previous month and 91.5% compared to last year’s figure. The increase is due in large part to considerable hikes on the energy raw materials market, where prices for coal, natural gas and crude oil witnessed a strong upward movement in September.

The uptick for European natural gas was most pronounced. However, prices declined on average for industrial raw materials – HWWI doesn’t list any polymers here – along with food and luxury items.

According to the institute, the higher coal and natural gas prices can be traced back to events that increased demand while limiting supply. Prices are driven by stronger demand for electricity in China, triggered by an economic recovery after the pandemic and a heat wave resulting in an increased use of air conditioning. A drought in the region impacted hydroelectricity supply, further boosting demand for energy raw materials such as coal and natural gas. Calls for imports have also increased.

Other economies are seeing similar rises in demand for coal and natural gas following the global economic recovery, which has further underpinned prices. Quotations for European natural gas, in particular, reached historic levels in September, with the figures more than four times as high versus the same period last year. Inventories were already low following the long, cold winter period 2020/21 and couldn’t be fully replenished due to the increased demand.

Furthermore, supply of natural gas in Europe has declined. The Netherlands, an important producer of natural gas in the EU, was forced to reduce supply substantially due to seismic risks. All these developments resulted in the partial index for energy raw materials rising by 11.3% to 166 points in September 2021.