commodity markets review jun 2010

8/3/2019 Commodity Markets Review Jun 2010

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Commodity Markets Review

June 9, 2010 DECPG, The World BankNon-energy commodity prices fell by 4.7

percent in May due to concerns about demandin the wake of the Euro-debt crisis, and alsobecause of the strength of the U.S. dollarup7.4 percent versus the euro. Much of the pricedeclines were for industrial commodities.

Crude oil prices dropped 10.2 percent inMay, falling from $87/bbl at the beginning ofthe month to $68/bbl on May 25th. Prices havepartly recovered to above $73/bbl in early June.Global oil demand increased for a secondstraight quarter, up 2 percent in 2010-Q1 from ayear earlier. U.S. oil demand rose for a fourth

straight month in May with preliminary datashowing an 8 percent jump y/y. Distillatedemand was also up sharply for a second month.Despite this recovery, U.S. stocks of crude andproducts remain high due to both rising crudeimports and larger refinery output. The tragic oilspill in the Gulf of Mexico has not affected oilproduction, but will likely have a long-termimpact on oil development with respect totighter regulation and higher costs.

Crude oil future prices fell much less thanspot prices during May, as investors continue to

anticipate tighter markets going forward oncethe global economy and oil demand recovers.Contract prices (WTI on NYMEX) forDecember 2018 delivery declined only $10/bblduring the month, and this price has consistentlyremained above $90/bbl.

Agriculture prices decreased 1.6 percent in

May, their fourth monthly decline, with amoderate fall in most main indices. The pricedeclines amidst macro-economic fears weremuch smaller than for energy and metalsbecause of the low-income elasticities for mostagriculture commodities. Moreover, globalmarkets are generally well supplied. The largestdecline was for sugar, down nearly 8 percent, ona good start to South Americas harvest. Wheatprices fell 6 percent because of ample globalsupplies, including India's consideration toresume exports because of a huge surplus this

season. On the plus side, maize prices rose 4percent on cool weather in the U.S. midwest.

Base metals prices plunged 12.3 percent inMay due to concerns about demand amid falloutfrom the Eurozone crisis and worries aboutfiscal tightening in China. Metals prices sufferedthe largest declines in part because they hadenjoyed a lengthy run-up despite large stocksand surplus capacity. All base metal prices fell,particularly those for which stocks have beenincreasingnotably lead and zinc where pricesdropped 17 percent. The price declines were

much less in markets that are relatively tight andwhere stocks are falling, e.g., tindown 6percent. Meanwhile gold prices rose 5 percentand set record nominal highs in early June due tosafe-haven buying amid the broad sell-off offinancial assets.

Prepared in the Development Economics Prospects Group (DECPG) by Shane Streifel, John Baffes and Betty Dow.Katherine Rollins is task assistant.

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May-08 Nov-08 May-09 Nov-09 May-10

Major Price IndicesIndices of Nominal US$ Prices (2000=100)

Energy

Base Metals

Agriculture

125

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175

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225

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275

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May-08 Nov-08 May-09 Nov-09 May-10

Agriculture Prices - Sub-IndicesIndices of Nominal US$ Prices (2000=100)

Food

Beverages

Raw Materials


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Major Movers May1

Gold prices increased 4.9 percent due to stronginvestment demand and greater risk aversion,triggered by the Euro-debt crisis.Maize prices rose 4.0 percent on a spell ofunseasonably cold weather during May in theU.S. midwest. The global market, however, iswell-supplied with record crops in other regions,e.g. South Africa and Central Asia.Natural gas (U.S.) prices increased 3.7 percentdue to higher demand, both for heating andcooling during the month, as temperaturestransitioned from below-normal to well above.Logs (Malaysia) prices rose 3.1 percent onstrong demand from China and India, andreduced supplies from PNG and Gabon.Beef prices fell 3.3 percent following a six-month surge that had resulted from supplyshortages in the U.S. and Australia/NewZealand, and higher U.S. imports.Soybean oil prices fell 4.3 percent following arecord South American crop which significantlyraised crushings and soybean oil supplies.Wheat prices decreased 5.8 percent because of awell-supplied global market, including India'sconsideration to resume exports from its hugesurplus this season.Tin prices declined 6.0 percent, although themarket remains in deficit with strong demand inChina, constrained supplies, and falling stocks.Rubberprices fell 6.8 percent due to improvedsupplies in Southeast Asia following drought,and also because of lower crude oil prices.Sugar prices decreased 7.6 percent followingBrazil's good start of the current crop. Stocks inmany countries are at low levels, however,reducing the prospects of further price declines.Urea and TSP fertilizer prices fell 9.1 percentand 5.0 percent, respectively, on surplus supplywith tenders being oversubscribed by sellers.Crude oil prices declined 10.2 percent due todemand concerns and high levels of stocks.

Copper prices fell 11.7 percent on fears ofslowing demand in China and weak uptake indeveloped countries.Aluminum prices declined 11.9 percent onrecord-high global production, although strong

1 Percent change of average May 2010 prices compared toaverage April 2010 prices in nominal U.S. dollars (graphincludes 12-month changes in grey).

demand has helped keep LME inventoriesrelatively flat the past 11 months.Nickel prices dropped 15.5 percent, in spite ofstrong stainless steel demand and strike actions,on expectations of the market moving intosurplus during the second half of 2010.

Zinc prices plunged 16.8 percent, despiterecovering demand, due to continuing build ofLME stocks, and surging production andgrowing exports in China.Lead prices plunged 16.9 percent on weakdemand in developed countries, rising stocks,increased availability of scrap, and risingChinese production and exports.

-20 -10 0 10 20 30 40 50

Lead

Zinc

Nickel

Aluminum

Copper

Crude oil , average spotUrea, bulk

Sugar, world

Rubber, Singapore

Tin

Wheat, US, HRW

TSP

Soybean oil

Beef

Rice, Thai, 5%

Palm oil

Sorghum

Soybeans

DAP

Coffee, robusta

Cocoa

Coconut oilGroundnut oil

Coal, Australia

Phosphate rock

Potassium chloride

Palmkernel oil

Silver

Natural gas, Europe

LNG

Tea, avg 3 auctions

Sawnwood Malaysia

Cotton, A Index

Coffee, arabica

Soybean meal

Logs, Malaysia

Natural gas, US

MaizeGold

Percent Changes in Price, Nominal US $

May '10/Apr

May '10/May

-20.1

-56.1

-30.5

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COMMODITY PRICE DATAAnnual averages Quarterly averages M onthly averages

Jan-Dec Jan-Dec Jan-May Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar Mar Apr MayCommodity Unit 2008 2009 2010 2009 2009 2009 2009 2010 2010 2010 2010

EnergyCoal, Australia a/ $/mt 127.10 71.84 97.17 71.93 66.48 71.31 77.66 95.19 94.38 100.15 100.13Crude oil, avg, spot a/ $/bbl 96.99 61.76 78.20 44.11 59.19 68.21 75.50 77.06 79.30 84.18 75.62Crude oil, Brent a/ $/bbl 97.64 61.86 78.24 44.98 59.13 68.37 74.97 76.65 79.27 84.98 76.25Crude oil, Dubai a/ $/bbl 93.78 61.75 77.51 44.56 58.93 68.07 75.46 75.86 77.37 83.09 76.87Crude oil, West Texas Int. a/ $ /bbl 99.56 61.65 78.85 42.80 59.52 68.21 76.08 78.67 81.25 84.48 73.73Natural gas Index a/ 200 0=100 267.9 153.5 160.2 198.2 142.9 123.3 149.4 170.3 160.9 143.5 146.8Natural gas, Europe a/ $/mmbtu 13.41 8.71 8.34 11.94 8.18 6.91 7.81 8.84 8.93 7.52 7.63Natural gas, US a/ $/mmbtu 8.86 3.95 4.72 4.57 3.70 3.17 4.36 5.15 4.29 4.01 4.16Natural gas LNG, Japan a/ $/mmbtu 12.53 8.94 10.55 10.90 7.60 7.91 9.33 10.32 10.42 10.80 11.00

Non Energy CommoditiesAgricultureBeveragesCocoa b/ c/kg 257.7 288.9 325.8 259.4 257.9 296.4 341.8 329.7 307.7 321.3 318.6Coffee, Arabica b/ c/kg 308.2 317.1 363.3 283.9 320.2 322.7 341.7 353.7 362.7 373.1 382.3Coffee, robusta b/ c/kg 232.1 164.4 153.2 175.8 165.3 160.1 156.4 150.8 148.3 157.7 155.9Tea, auctions (3), average b/ c/kg 242.0 272.4 279.5 218.0 266.1 303.6 301.9 279.0 262.1 277.4 282.9Tea, Colombo auctions b/ c/kg 278.9 313.7 330.8 261.7 299.1 356.1 338.0 335.1 332.2 326.6 321.9Tea, Kolkata auctions b/ c/kg 225.5 251.5 235.5 177.4 271.3 273.0 284.4 215.8 174.2 245.3 284.7Tea, Mombasa auctions b/ c/kg 221.8 252.0 272.1 214.9 228.0 281.7 283.2 286.1 280.0 260.3 242.0

FoodFats and OilsCoconut oil b/ $/mt 1,224 725 875 677 779 711 734 834 921 939 931Copra $/mt 816 480 586 447 513 469 491 557 608 628 630Groundnut oil b/ $/mt 2,131 1,184 1,358 1,283 1,166 1,133 1,152 1,359 1,380 1,361 1,354Palm oil b/ $/mt 949 683 813 577 743 679 732 808 832 830 813

Palmkernel oil $/mt 1,130 700 964 577 763 700 761 922 995 1,020 1,034Soybean meal b/ $/mt 424 408 359 365 424 431 412 369 329 340 349Soybean oil b/ $/mt 1,258 849 904 755 863 856 921 917 915 903 864Soybeans b/ $/mt 523 437 413 394 461 454 439 417 408 411 406

GrainsBarley b/ $/mt 200.5 128.3 145.1 116.3 129.5 122.0 145.5 143.6 147.0 151.7 143.0Maize b/ $/mt 223.1 165.5 161.7 166.9 176.0 151.3 167.8 162.7 159.0 157.1 163.4Rice, Thailand, 5% b/ $/mt 650.2 555.0 505.7 586.3 552.4 539.0 542.3 535.3 502.2 466.0 456.3Rice, Thailand, 25% $/mt n.a. 458.1 447.4 469.4 458.7 441.4 462.8 477.0 445.6 408.7 397.3Rice, Thailand, 35% $/mt n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.* Rice,Thai, A1.Special / Super $/mt 482.3 326.4 375.2 323.4 326.3 309.7 346.1 400.7 377.0 343.0 331.0Sorghum $/mt 207.8 151.1 153.5 145.3 155.8 139.3 163.8 156.9 154.7 149.4 147.3Wheat, Canada $/mt 454.6 300.5 271.7 321.9 325.6 271.2 283.4 279.0 270.7 264.7 256.7Wheat, US, HRW b/ $/mt 326.0 224.1 192.1 231.6 250.5 208.8 205.4 195.4 191.1 192.9 181.6Wheat US SRW $/mt 271.5 186.0 191.7 187.4 195.6 165.2 195.6 193.5 190.0 187.8 190.3

Other FoodBananas EU $/mt 1,188 1,145 1,022 1,142 1,288 1,118 1,032 1,020 1,144 1,051 999Bananas US b/ $/mt 844 847 793 891 858 826 813 781 838 825 799Fishmeal $/mt 1,133 1,230 1,733 1,013 1,097 1,276 1,535 1,660 1,672 1,873 1,811Meat, beef b/ c/kg 313.8 263.6 330.0 245.2 262.8 273.2 273.5 314.2 334.9 359.6 347.8Meat, chicken b/ c/kg 169.6 171.7 169.2 173.5 174.1 173.9 165.1 167.2 168.3 170.9 173.3Meat, sheep c/kg 458.5 427.6 450.1 378.5 428.7 453.3 450.1 447.6 442.7 456.1 451.3Oranges b/ $/mt 1,107 909 1,014 799 870 861 1,107 1,009 955 995 1,049Shrimp, Mexico b/ c/kg 1,069 945 874 976 970 970 864 827 838 865 1,025Sugar EU domestic b/ c/kg 69.69 52.44 45.24 51.44 53.76 55.43 49.11 46.38 45.47 44.98 42.10Sugar US domestic b/ c/kg 46.86 54.88 77.88 43.82 47.89 57.31 70.48 84.31 77.41 68.38 68.11Sugar, world b/ c/kg 28.21 40.00 45.05 28.85 33.89 46.98 50.29 51.82 41.14 36.27 33.51

Raw MaterialsTimberLogs, Cameroon $/cum 526.9 421.5 425.5 426.8 394.8 414.9 449.5 431.4 427.6 429.6 403.5Logs, Malaysia b/ $/cum 292.3 287.2 252.1 313.6 284.5 279.6 271.1 253.6 249.8 246.0 253.7Plywood c/sheets 645.5 564.6 560.6 572.8 565.8 561.5 558.4 557.2 557.2 564.7 566.8Sawnwood, Cameroon $/cum 958.3 748.9 800.7 689.2 721.2 779.0 806.3 804.1 803.3 818.1 772.9Sawnwood, Malaysia b/ $/cum 889.1 805.5 804.0 813.7 829.7 771.4 807.4 787.8 790.1 820.2 836.5Woodpulp $/mt 820.2 614.6 817.3 565.1 550.0 627.7 715.6 780.9 813.7 850.5 893.0

Other Raw MaterialsCotton A Index b/ c/kg 157.4 138.2 185.8 120.8 132.4 141.9 157.7 178.8 189.2 194.2 198.6

Cotton Memphis c/kg 161.3 145.3 189.7 122.4 137.5 148.8 172.4 183.6 191.8 198.5 199.1Rubber, US c/kg 284.1 214.6 361.8 165.8 187.0 221.0 284.7 345.2 357.1 398.8 374.6Rubber, Singapore b/ c/kg 258.6 192.1 343.7 146.0 166.4 199.3 256.5 318.6 333.9 394.8 368.0

continued on next page

a/ Included in the energy index (2000=100) b/ Included in the non-energy index (2000=100) c/ Steel not included in the non-energy indexd/ base metals plus iron ore e/ Includes aluminum, copper, lead, nickel, tin and zinc$ = US dollar = US cent bbl = barrel cum = cubic meter dmtu = Dry Metric Ton Unit kg = kilogram mmbtu = million Brit ish thermal unitsmt = metric ton toz = troy oz n.a. = not available n.q. = no quotation


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COMMODITY PRICE DATAAnnual averages Quarterly averages M onthly averages

Jan-Dec Jan-Dec Jan-May Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar Mar Apr May2008 2009 2010 2009 2009 2009 2009 2010 2010 2010 2010

FertilizersDAP b/ $/mt 967.2 323.1 464.2 362.2 303.6 309.6 316.9 464.8 476.3 466.0 460.6Phosphate rock b/ $/mt 345.6 121.7 111.3 193.3 113.3 90.0 90.0 102.1 105.0 125.0 125.0Potassium chloride b/ $/mt 570.1 630.4 326.3 865.2 726.7 506.8 423.0 334.0 312.5 314.4 315.0TSP b/ $/mt 879.4 257.4 335.4 321.7 247.7 224.7 235.7 316.9 354.4 372.5 353.8Urea, E. Europe, bulk b/ $/mt 492.7 249.6 265.1 267.3 241.1 241.6 248.3 281.0 278.8 252.7 229.6

Metals and MineralsAluminum b/ $/mt 2,573 1,665 2,169 1,360 1,485 1,812 2,003 2,163 2,206 2,317 2,041Copper b/ $/mt 6,956 5,150 7,256 3,428 4,663 5,859 6,648 7,232 7,463 7,745 6,838Gold $/toz 872 973 1,136 909 922 960 1,102 1,109 1,113 1,149 1,205Iron ore b/ c/dmtu 140.6 101.0 127.4 101.0 101.0 101.0 101.0 101.0 101.0 167.0 167.0Lead b/ c/kg 209.1 171.9 216.2 115.7 149.9 192.8 229.3 222.1 217.2 226.5 188.3Nickel b/ $/mt 21,111 14,655 21,583 10,471 12,920 17,700 17,528 19,959 22,461 26,031 22,008Silver c/toz 1,500 1,469 1,747 1,265 1,376 1,477 1,760 1,693 1,715 1,817 1,842* * Steel products index, Japan c/ 2000=100 289 227 223 275 215 211 207 211 220 234 247Steel cr coilsheet, Japan, Reins c/ $/mt 966 783 768 1,033 700 700 700 725 775 813 850Steel hr coilsheet, Japan, Reins c/ $/mt 883 683 668 933 600 600 600 625 675 713 750Steel, rebar, Japan, Reinstated c/ $/mt 760 486 577 473 450 500 522 546 578 615 630Steel wire rod, Japan, Reinstate c/ $/mt 1,010 969 760 1,200 1,007 857 814 751 753 765 780Tin b/ c/kg 1,851 1,357 1,758 1,103 1,351 1,459 1,517 1,721 1,755 1,868 1,757Zinc b/ c/kg 187.5 165.5 224.0 117.2 147.3 176.1 221.4 228.9 227.5 236.7 196.8NEW World Bank commodity price indices for low and middle income countries( 2000 =100)Energy 342.0 214.3 268.8 166.3 204.5 230.3 256.1 266.1 271.6 285.4 260.1

Non Energy Commodities 272.0 213.2 250.0 189.9 207.8 219.8 235.2 244.2 243.8 265.1 252.6Agriculture 229.5 197.8 216.4 181.9 197.1 199.5 212.6 216.6 212.1 217.8 214.4Beverages 210.0 219.9 243.0 197.9 207.3 226.4 247.9 242.5 233.3 243.3 244.2Food 247.4 205.1 208.7 190.4 209.8 206.4 213.7 213.1 205.5 203.4 200.6Fats and Oils 277.3 216.2 223.3 191.4 227.9 220.9 224.5 224.7 221.1 222.4 219.8Grains 281.7 214.9 199.5 221.3 225.3 202.3 210.8 205.1 197.6 192.0 190.5Other Food 177.1 181.6 197.8 161.3 172.1 191.2 202.0 205.1 192.3 188.9 184.5Raw Materials 195.7 168.7 221.7 153.1 161.1 168.9 192.0 211.9 217.2 239.9 232.9Timber 150.5 138.9 134.7 143.1 141.8 133.6 137.3 132.7 132.6 136.1 139.1Other Raw Materials 245.3 201.4 316.9 164.0 182.2 207.5 251.8 298.6 309.8 353.4 335.4Fertilizers 566.7 293.0 257.6 376.6 300.6 252.1 242.8 259.0 261.5 261.8 249.5Metals and Minerals d/ 325.7 235.6 318.1 185.0 219.0 257.6 280.8 299.0 306.8 362.4 331.3Base Metals (NEW) e/ 287.9 208.9 289.3 146.6 188.5 236.0 264.6 287.0 296.6 311.9 273.5

a/ Included in the energy index (2000=100) b/ Included in the non-energy index (2000=100) c/ Steel not included in the non-energy indexd/ base metals plus iron ore e/ Includes aluminum, copper, lead, nickel, tin and zinc$ = US dollar = US cent bbl = barrel cum = cubic meter dmtu = Dry Metric Ton Unit kg = kilogram mmbtu = million Brit ish thermal units

mt = metric ton toz = troy oz n.a. = not available n.q. = no quotation


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Selected Commodity Prices, Nominal US dollars, 2005-2010


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Selected Commodity Prices, Nominal US dollars, 2005-2010 Contd


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Selected Commodity Prices, Nominal US dollars, 2005-2010 Contd

commodity markets review jun 2010

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