Global commodity prices dived 7.9% month on month in May, contrasting a short-lived 2.7% rebound in April. The downturn marked the sharpest price drop since July 2022 and the second steepest fall since the early months of the global Covid-19 pandemic from April 2020.
The decline in May was broad-based, with all four commodity groups tracked by our panelists posting monthly declines. Sliding energy prices were in the driver’s seat, chiefly due to a near 10.0% drop in global crude oil prices as weak economic data from China and the threat of a U.S. default weighed on demand prospects. That said, U.S. natural gas prices rebounded slightly after five consecutive months of contraction. Meanwhile, prices for base metals fell at a notably sharper pace—all 12 base metals tracked by our analysts saw prices fall in May—owing to slowing growth momentum in China and a cooling global economy. Similarly, precious metals prices retreated due to a stronger dollar and higher U.S. bond yields. Finally, agricultural prices posted the strongest decline in nearly a year in May, chiefly due to the prolongation of the Black Sea Grain Deal, strong production forecasts from the U.S. Department of Agriculture and expectations of more favorable weather in South America.