Beyond oil: other raw materials affected by the war in Iran

The war in Iran has led to a rise in the prices of several raw materials. In a context where the fluidity of international trade is no longer certain, it becomes essential to identify the dependencies of businesses and exposed sectors.

In the short term, both sides have sought to end the conflict. However, a lasting ceasefire is yet to emerge. Negotiations still face hurdles on significant issues like uranium enrichment, the Strait of Hormuz, and the easing of sanctions.

In case of stagnation, it is necessary to look beyond oil. The tensions will fuel inflation but also weigh on the margins of certain businesses, sometimes in sectors where the connection to the Middle East is less obvious.

Without even considering oil, the attention shifts to other specialized raw materials. One of the most concerning for the stock markets is helium. This gas is closely linked to the semiconductor industry and concerns are rising within the sector.

Helium is essential in various stages of chip manufacturing, particularly for its cooling properties. Its scarcity and storage challenges pose significant risks.

Major gas suppliers like Air Liquide, Linde, or Air Products hold pricing power that positively impacts margins as the conflict persists. However, they also face short-term operational constraints to diversify their supplies.

South Korean companies SK Hynix and Samsung Electronics, dominant in memory chips, have stated they have ample stocks to last until June. Yet, they are paying premiums to secure their supplies.

The rise in pistachio prices, driven by trends like pistachio-filled chocolates, has boosted the margins for certain brands. The Iranian market plays a significant role in global production and exports.

Another raw material under pressure is sulfur, crucial for fertilizer production and key aspects of copper and nickel production chains. Geopolitical and agricultural tensions are driving up prices, impacting industries utilizing sulfur for various purposes.

Iran is a major exporter of chemicals, including methanol, a vital component in several industries. The war’s implications extend beyond oil, emphasizing the critical dependencies that are often overlooked.