Simona Bernatonyte’s Post

World Bank Explains Why Commodity Prices are Hardening   The World Bank expects global economic growth in 2024 and 2025 to be half a percentage point slower than the average over the half decade before the Covid-19 pandemic, but predicts that commodity prices would be 40% higher than the 2015-2019 levels.   In a blog post, the Bank says energy and food prices would moderate but remain 40% and 30% higher than their 2015-2019 averages respectively with base metals also rising slightly over the next two years, averaging 40% more than the 5-year base.   Going forward, geopolitical tensions would remain a key risk to the commodity prices outlook and economic growth, the post says while warning of further supply shocks even though some metrics show that the number of armed conflicts are already at their highest in decades.   Besides conflicts, commodity prices would be impacted by global oil supplies, where OPEC+ members have held back over six billion barrels per day, equivalent to 7% of global demand. Growing Chinese demand despite sluggish economic growth and Beijing’s growing pace of industrial lending that is driving up demand for metals are also factors. 

💡The Size of the Oil Market vs Top 10 Metal Markets🛢 While the global economy relies on many commodities, none come close to the massive scale of the oil market. Besides being the primary energy source for transportation, oil is a key raw material for numerous other industries like plastics, fertilizers, cosmetics, and medicine. As a result, the global physical oil market is astronomical in size and has a significant economic and geopolitical influence, with a few countries dominating global oil production. 🔥 The combined market size of the top 10 metal markets amounts to $967 billion, less than half that of the oil market. In fact, even if we added all the remaining smaller raw metal markets, the oil market would still be far bigger. This also reflects the massive scale of global oil consumption annually, with the resource having a ubiquitous presence in our daily lives. 🚨 The Big Picture While the oil market towers over metal markets, it’s important to recognize that this doesn’t downplay the importance of these commodities. Metals form a critical building block of the global economy, playing a key role in infrastructure, energy technologies, and more. Meanwhile, precious metals like gold and silver serve as important stores of value. As the world shifts towards a more sustainable future and away from fossil fuels, it’ll be interesting to see how the markets for oil and other commodities evolve.

Several critical supply chains, from cocoa and LNG to lithium and semiconductors, are facing significant challenges. Disruptions, geopolitical tensions, and rising demand are reshaping these industries. 🔗 https://lnkd.in/eN_i-R_D #SupplyChain #GlobalTrade #Economics

Commodities in 2025: Trends That Will Shape Global Trade As we approach 2025, global trade is evolving rapidly. Sustainability, geopolitical shifts, and technological advancements are redefining how commodities are traded. In agriculture, energy, and minerals, staying ahead of these trends is critical to thriving in an increasingly competitive market. 1. Sustainability Is Non-Negotiable Sustainability is now a core demand, especially for buyers seeking transparency and responsible sourcing. Sugar exemplifies this shift, as its role in renewable energy markets like ethanol grows. In 2025, businesses prioritizing eco-friendly practices will lead the way. 2. Geopolitics Drives Trade Trade patterns are increasingly shaped by geopolitical realities. Asia: Strong demand for chicken paws, rice, and palm oil. South America: Sugar exports face logistical challenges but remain vital. Middle East: New investments in energy and agriculture create opportunities. Staying informed and adaptable is essential in navigating these changes. 3. Technology Accelerates Efficiency Digital platforms and real-time analytics are transforming trade. Faster communication and transparency are becoming industry standards. Companies embracing these tools are positioning themselves for success in a rapidly modernizing market. 4. Commodities to Watch in 2025 Key commodities include: Sugar: A staple in both food and renewable energy. Chicken Paws: A high-demand delicacy in Asia. Iron Ore and Steel: Critical for global infrastructure and industrial growth.

In general, most commodities are seeing some degree of shortage relative to demand. This plays into our big-picture theme of a commodity bull super-cycle, which is a period of sustained commodity price increases caused by chronically short supply.

🌾 Global Agro Commodities Market Update – September 2024 🌍  The global agro commodities market is witnessing significant developments: 1.Rising Demand for Rice and Wheat: With climate uncertainties impacting yields, demand for staples like rice and wheat is on the rise, particularly from Asia and Africa. Importers are actively seeking reliable sources to stabilize their food security strategies. 2. Sustainability Takes Center Stage: Sustainability is no longer just a buzzword; it's a market driver. Major buyers, especially in Europe, are increasingly prioritizing sustainably sourced products. This trend is influencing producers to adopt more eco-friendly practices. 3. Currency Fluctuations Impacting Trade: Recent volatility in major currencies is impacting the cost-effectiveness of exports. Exporters are looking at hedging and diversified markets to mitigate risks. 4. Technological Advancements: The adoption of AI and blockchain in the supply chain is transforming the agro commodities sector. From traceability to efficient logistics, technology is enhancing transparency and efficiency. 5. Trade Policy Shifts: Ongoing trade negotiations, particularly between major economies like the US and China, are shaping the global agro commodities landscape. Exporters must stay informed to adapt to these changes. #AgroCommodities #Sustainability #GlobalTrade #Innovation #MarketUpdate

The global market for industrial commodities has been under significant strain recently, affecting consumers, businesses, and economies all across the world. The global economy is dependent on industrial commodities, which include metals, energy sources, and agricultural products used in manufacturing. The global economic slowdown is a major contributor to the pressure on industrial commodity prices. Reduced industrial activity is the outcome of economic downturns in major economies such as the United States, China, and the European Union. The crisis has reduced demand for core industrial commodities such as steel, copper, and oil. Prices typically fall in reaction to a downturn in demand, as producers attempt to entice buyers into an unfavorable market. Read more at the link in our bio. https://lnkd.in/ez4_qgQ5

The picture of the US economy as the locomotive of global GDP growth developed some cracks over the past month as economic data releases have started coming in notably below expectations. However, for the time being, this is balanced by signs of an uptick in global trade activity, growth acceleration in select emerging markets and indications of a growth recovery even in Europe. Against this backdrop, commodity markets in aggregate managed to extend their advance even though as in the preceding month divergences at the sector level remain present. #newsletter #june #commodities #foodrevolution #products #picardangst https://lnkd.in/d3943s4

🌐 Global commodity markets are facing a "super squeeze," driven by supply constraints more than by demand growth. This scenario poses challenges and opportunities as geopolitical risks and climate change play pivotal roles in shaping commodity prices. 📉 Higher prices resulting from a super squeeze may not necessarily signal positive global growth, highlighting the need for a strategic approach to address supply chain disruptions and climate-related impacts. 💡 The lack of investments in critical transition metals like copper and nickel presents a significant hurdle in meeting the rising demand for energy transition materials. Without increased investments, the supply of these essential metals is at risk of falling short, potentially impacting the transition to a net-zero carbon future. 🔍 Current market dynamics indicate a potential prolonged squeeze on commodities, especially in the energy transition sector. More investment in mining projects and exploring new capacities is essential to ensure a stable and sufficient supply of key metals required for the global energy transition. 🔄 The volatile nature of commodities, coupled with geopolitical uncertainties, climate risks, and investment challenges, underlines the complexity of the current market environment. Advancements in technology could hold the key to unlocking new extraction methods, offering a potential solution to the current supply constraints. 📈 While metals, particularly those used in clean energy production, are expected to see the most significant impact, the broader commodity landscape remains uncertain. The interplay of economic downturns, global demand trends, and supply disruptions will continue to shape commodity prices in the foreseeable future. 🌍 Despite ongoing challenges, some analysts suggest that commodity markets remain adequately supplied, with the focus shifting towards balancing demand and supply dynamics amid a sluggish global economy. The hopes for a rebound in Asian demand could hold the key to a potential breakout year for commodities in the near future. https://lnkd.in/dBh7-59V