Commodities - Prices stay level in Q2
Global commodity prices fell slightly in May, according to an estimate compiled by FocusEconomics. The FocusEconomics global commodity price index slid 1.7% from April’s result, chiefly driven down by lower energy prices. In addition, base and precious metal prices lost ground, while agricultural prices rose slightly from the previous month.
Despite prices edging down in May, our analysts expect prices to remain broadly stable around Q1’s level in Q2 as a whole and project the FocusEconomics global commodity price index to come in at 74.0, marginally down from Q1’s result. A mixed performance across commodity groups is expected to hold prices relatively steady, as falls in base metal prices and energy prices are balanced out by rising precious metals and to a lesser extent agricultural prices. Looking at the base metal market, plunging iron ore prices, which have fallen around 30% year-to-date, are driving the decline. Concerns over China, the world’s largest importer of the metal, have dampened prices largely due to uncertainty over the economy’s trajectory and reports of high inventories at Chinese ports.
In the energy market, despite a deal between OPEC and non-OPEC nations to extend production cuts for nine additional months, oil prices are expected to have fallen slightly in Q2. However, the price of coking coal jumped to a multi-year high in April, in part due to supply disruptions, providing some positive impetus in energy prices. Overall, the global commodity price index is still significantly above 2015 and 2016’s lows. Despite a projected fall in quarter-on-quarter terms, the price index for Q2 is still expected to be 14.0% above Q2 2016’s figure.
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Price forecasts and historical data for Energy, Metals and Agricultural Commodities