High inflation benefits commodity producers and hurts companies with fixed-cost structures. The 2021–2023 inflation surge and the current 2026 Hormuz-driven energy spike both demonstrate this pattern clearly across European equity markets.
Inflation Winners: Commodity Producers
Companies producing commodities — oil, copper, aluminium, fertilizer — benefit when the prices they receive rise faster than their costs.
| Sector | Best Example | Why it Benefits |
|---|---|---|
| Oil & Gas | Equinor, Aker BP | Brent prices rise with energy inflation |
| Copper Mining | Anglo American, KGHM | Industrial metals track CPI closely |
| Fertilizers | Yara, K+S | Food inflation drives urea demand |
| Aluminium | Norsk Hydro | LME aluminium tracks energy costs |
| Defence | Rheinmetall | Government contracts often inflation-indexed |
Inflation Losers
Renewable energy stocks (Nibe, Ørsted) struggle in high inflation because rising interest rates increase discount rates and reduce project valuations. The 2022–2023 rate spike that accompanied inflation caused Ørsted to fall more than 70% from its 2021 peak.
The Signycle Inflation Strategy
During high inflation, focus on BUY signals for commodity producers (Brent, copper, urea signals at low levels). The EUR 10-year rate signal will typically be in SELL territory — meaning renewable stocks should be underweighted.