Global commodity prices recover some ground in September

Global commodity prices rose 3.8% over the previous month in September, contrasting August’s 5.3% drop and marking the strongest increase in five months.

September’s rebound mostly reflected a surge in energy prices, as well as sizeable increases in prices for base and precious metals. Overall, the price for the three commodity groups was positively affected by news that China and the United States would resume trade talks and President Trump’s comment that a deal “could happen sooner than you think”, which temporarily boosted economic sentiment. On the flip side, agricultural prices declined in September for the seventh time in the last nine months.

Weak prospects for the global economy continued to weigh on commodity prices, especially energy and base metals. Conversely, a somber outlook for the global economy is fanning demand for safe-haven assets such as precious metals. Against this backdrop, FocusEconomics Consensus Forecast panelists expect global commodity prices to decline 6.6% in Q4 2019 over the same period in 2018 (previously projected: -3.4% year-on-year). Next year, FocusEconomics panelists expect global commodity prices to rise a modest 0.1% in annual terms from Q4 2019 to Q4 2020 (previously projected: -1.6% yoy).

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