Globally, “commodities” are down 25% over the past 12 months. Reflecting the continued economic decline. Risk of recession
“Commodities” worldwide are down 25% over the past 12 months. especially crude oil and iron ore Reflecting the continued economic decline. Risk of recession
On July 6, 2566, CNBC reported that analysts indicated that commodity prices, such as crude oil and iron ore, were expected to fall in 2566, reflecting the continued global economic downturn and the risk of a recession.
Global commodities have fallen more than 25% in the past 12 months , as reflected in the S&P GSCI Commodities Index, a benchmark for commodity market performance. Industrial metals declined by 3.79% during the same period, while energy commodities such as oil and gas fell by 23%. Conversely, agricultural commodities such as grains, wheat, and sugar rose by approximately 11%.
While the overall picture of the index tends to follow the global economic slowdown and recession. Due to the recovery of COVID-19 China's losing momentum
Reid I'Anson, senior commodity analyst at Kpler, said via email, "Iron ore and copper are good indicators of the cyclical aspects of the global economy, including construction and manufacturing, which are in recession in many areas. This is expected to roll over into a broader decline in economic activity, particularly in the West."
Reid I'Anson predicts that the United States It is likely to see GDP shrink in the 4th quarter of 2566 or the first quarter of 2567, and will happen to Europe in the next 3-6 months.
Meanwhile, China reported a number of economic data that were weaker than market expectations. They pointed to the reopening of the country after several years of strict lockdown due to the COVID-19 pandemic. Bank of America analysts confirm China's recovery is weaker than expected.
Matty Zhao, head of basic materials and oil and gas research at the bank at the bank, said: Especially for real estate, investment fell 7% year-on-year. Declines in the real estate market are often related to falling demand for construction materials such as steel, aluminum, copper, and nickel.
Wall Street bankers predict China's real estate sector will be depressed for several years. And it seems that the Chinese government will not implement aggressive economic stimulus measures.
While commodity prices rose due to El Niño's impact on crop yields, energy and industrial metals traded much lower. Analysts agree that iron ore and oil were among the most affected commodity groups. Kpler also cited a downward trend for copper. Oil prices plummeted, with the Brent index plunging 34.76% year-on-year, despite OPEC production cuts.
According to BofA, average annual steel and iron ore prices fell 16% year-on-year. due to sluggish construction demand The slump in construction demand is also reflected in other construction materials such as cement, which has inventory levels as high as 75%.
Jim Wiederhold, director of commodities and real estate at S&P Dow Jones Indices, said, “Commodities like industrial metals tend to underperform leading economic indicators like the PMI, and historically this has helped signal when a downturn might occur. Oil tends to fall sharply when there is a slowdown.”
