The headlines that are of most interest to us this week are the ones that continue the narrative of very strong demand, as they continue to point to materials inflation. While the auto producers have some raw material price protection in their contracts, the very strong results for 1Q 2021 suggest that they are not having to compromise much on pricing, as the demand is there, interest rates are low and consumer spending power is higher because of a year of incrementally adding to savings.
The inflationary pressures in the shipping market, something that even the automakers likely cannot avoid, continue as shown in exhibit below. The primary focus of today's daily report is materials price inflation.
Source: Baltic Exchange, Bloomberg, C-MACC Analysis, May 2021
