If you’ve been a victim of the supply chain over the past two years, we have some good news for you. Fears of a recession and slowing consumer spending (not the good news) are driving down two key business costs…

1/ Commodity prices: The S&P GSCI Index — a benchmark for commodity prices (i.e., metals, agriculture, livestock) — has fallen ~20% in the past three months.

The index is now trading at levels before the Russian invasion sent prices soaring.

• “Demand destruction is happening on the consumer side, so it’s filtering through to the metals markets,” per CRU’s Head of Multi Commodity Analysis (FT).
• But supply shortage concerns are helping prices from breaking even lower — with several major European manufacturing facilities shut down from high energy prices.

2/ Shipping prices: The summer season is usually the peak shipping season as retailers stock up for the holidays. But this year, retailers are still trying to eliminate excess inventory — while forecasting lower demand.

• After freight rates jumped nearly 10x in 2021, the cost to ship a container from China to the U.S. fell 60% in 2022.
• Analysts and shipowners expect shipping rates to continue to fall for the rest of 2022 and into 2023 (WSJ).

Investors: Retailers and manufacturers benefit at the expense of shipping companies and metal extractors. This is a big relief for businesses that have struggled with higher costs and trouble forecasting unpredictable shipping times and prices.