Procurement markets
Despite the uncertainties from the war in Ukraine in the first half of 2022, we only expect DB Group to experience a few physical bottlenecks on the procurement side. In many markets, however, there is still an imbalance resulting from strong demand and an additional supply shortage due to the Covid-19 pandemic and the war in Ukraine. In addition to the highly volatile commodity markets, we continue to observe unprecedented price dynamics, including in the construction and logistics sectors.
Climate protection efforts are accelerating structural change in the energy sector. The expansion of renewable energies is expected to further strengthen price fluctuations on the electricity spot market due to their limited predictability. While the phase-out of nuclear power and coal power has created the potential for higher prices on the production side, developments in the mobility sector will have a significant impact on demand dynamics. In the long term, however, a cheap supply of energy should become available following the successful transition to renewable energies.
For 2022, an imbalance of very rigid demand and a shortage of key products such as chips and raw materials (such as iron ore) is expected. On the production side, there may be shortfalls and thus further supply shortages. In Germany, coal-fired power generation remains attractive due to the continued high gas prices. The situation on the gas market will remain extremely tense. Due to the current developments in the Russia-Ukraine conflict, the prices of electricity, coal and crude oil are likely to undergo a further significant increase. There is currently no foreseeable end to this development.
There is likely to be little scope for prices of emissions allowances (CO₂ certificates) to fall in the next few months. The political will of the Federal Government and the European Commission to achieve a rapid climate-neutral transformation of the energy supply will make itself felt here.
Overall, the market conditions suggest that electricity prices will remain high in the first few months of 2022. Here, spot prices will be influenced by the temperatures and wind volume even more than in previous years.
Crude oil prices are also not expected to ease in the near future. In addition, as the Covid-19 pandemic eases, demand for oil products will increase significantly and the war in Ukraine will cause supply disruptions.
