Look at the broader markets for local stocks, we have been in the doldrums for more than 6 months. Although the indexed stocks have picked up over the last couple of weeks, the broader market still has not found its legs yet. However indications are strong for a good run for second and lower liners for the next 3-4 months going into CNY 2022.
There are concerns over supply chain bottlenecks and logistics "route/delivery" congestion. To me, it will take time to work itself out as different countries are opening up more liberally in recent weeks. These bottlenecks should not be viewed negatively, it shows the pent up demand is there, that the demand recovery is more sustained than it appears to be.
IT IS NOT THE FLIP SIDE, we are not at a situation where inventory is building up over weak demand.
Bottlenecks are viewed negatively by some as a rush for product delivery completion, and once satisfied, will die down. Well, looking at broader data, the recovery is from pent up demand, and also amore sustained recovery from businesses reopening. The massive liquidity taps turned on by most countries are now circulating with greater velocity.
The recent inflation data from the US supports that. Real inflation will creep in as more sustained demand is seen. If demand is a quick one off, you won't see much price pressure.
Look at where palm oil prices are. Look at the margins for gas, and the flow on rally into oil as some are switching to alternatives. The world’s most crucial metals continued on a breakneck surge as energy shortages forced more production cuts and piled pressure on manufacturers, fueling concerns about inflation.