Wars always give commodity exchanges a twitch. The Iran-Iraq one is no exception. It gives an even bigger twitch to the school of thought that believes the West is particularly vulnerable because of its dependence on raw materials from a world becoming every day more unstable.

At first sight cobalt is of major important to the airplane industry. Tungsten is said to be "the most highly political metal in the world." It is used for armor-piercing shells.

Manganese is a major alloy in the steel industry. Chrome is a critical element in high-performance steels. Phosphates are indispensable to farmers.

These key raw materials and a handful of others make the wheels of the whole industrial world go round. Yet they are concentrated in only a few parts of the globe. Eight of the most crucial commodities are found in only three countries. Ninety percent of the world's chrome is in Zimbabwe and South Africa. South Africa and the Soviet Union have 90 percent of the world's known land-based reserves of manganese. They also have 98 percent of the world's platinum. Seventy percent of the world's tin and tungsten are in the Third World. One-third of the world's supply of cobalt comes from Zaire.

Not only are these crucial materials geographically concentrated, it is also thought by some observers that they lend themselves to the formation of cartels. This and the growing political instability of the producing regions have encouraged the United States and Britain to review their stockpiling policy and sent France and West Germany on a buying spree to acquire adequate reserves.

On a more political level, powerful voices are arguing for a rapproachment between the West and South Africa to make sure South Africa's unique concentration of scarce raw materials stays in friendly hands.

In fact, the arguments of the doomsayers, whether they be friends of white South Africa on the one hand or ardent Club of Rome enthusiasts on the other, are overdone. There is room for maneuver and the situation is by no means as bleak as is often suggested.

The question of political instability should be given a little context. Undoubtedly, there will be many more wars in the Third World in the years to come. However, many of them can come and go without affecting the traffic in raw materials. The Indo-Pakistan war of 1971, although engulfing a whole subcontinent, had no impact on the supply of critical raw materials. Neither does the Cambodian-Vietnamese war today. Looking ahead, China can fight Taiwan or Vietnam, the Somalis can grind down the Ethiopians, the Brazilians and the Argentinians can have a mighty punch-up and dictators can be deposed in Central America, but none of this should cause much of a flutter on the London Metal Exchange. On the other hand political disturbances in South Africa are bound to be a cause for anxiety.

Cartels, too, are given more potency than they deserve.

In the pre-synthetic rubber days of 1920 the world was aghast when Malaya and Ceylon established a rubber cartel. Prices rose through the roof, not unlike oil today. The car industry looked as if it might grind to a halt. In the end, new plantings in Indonesia brought the price plummeting down. In more recent times, Morocco in 1974 tried singlehanded to transform the phosphate rock market. Prices quadrupled, only to provoke the expansion of production elsewhere. Prices soon slumped.

The fact is that for many raw materials, a substantial increase in price can make unexploited reserves in other countries economic or encourage the use of substitutes.

Cobalt is a good example. Two years ago the West went into spasms when Zaire's mineral-rich Shaba Province was thought to have been invaded by rebels. Prices soared. In fact, the high prices have produced a much healthier situation. Production has expanded in Zambia and a new mine in Canada will soon add large quantities to supplies.

There was a similar response to the illegal declaration of independence by white Rhodesia in 1964. There were widespread fears that the central African copper mines might be shut down if fighting erupted. It prompted the British Post Office to develop aluminum telecommunications cables.

Managanese is unlikely to become the object of a Soviet-South African cartel, but it could, it is argued, become a Soviet monopoly if South Africa becomes involved in a long civil war. However, political instability will encourage a step-up of mining in Australia, India, Brazil and a number of African countries.

It is the same with chrome. A report by the South African Financial Times suggests that if South African supplies of chrome disappeared, price rises would make mining in countries like Turkey and the Philippines more profitable.

The best news of all is that the Law of the Sea Conference looks as if it has overcome its major negotiating hurdles and will be ready for signature next year. This will enable deep sea mining to go ahead. Production will not be on a commercial scale until the 1990s. Nevertheless, a decade is not much in mining terms and already the prospect is encouraging manganese, nickel, cobalt and copper users.

Of course, there are always going to be short-term problems. Stockpiles are a sensible insurance policy. Better still, the Western nations should set up a strategic metals counterpart to the International Energy Agency. This can monitor shortages, organize a sharing system in times of emergency and make sure that competitive bidding does not allow a crisis situation to get out of hand.