On 18 july, the reference news network reported a downward trend in international commodity prices, including crude oil and agricultural products, according to japanese economic news on 17 july. About 60 per cent of the world's commodities that are sensitive to the dynamics of the landscape show a decline in the prices of their main products compared to the beginning of april. The market is wary of the slowdown in the global economy, and the tariff policy imposed by united states president trump may lead to a weakening of demand and the related expectation of further weakening market conditions。
International commodities, such as crude oil, are located upstream of the consumer market, with price movements usually ahead of economic conditions. As a result, commodity market dynamics are an important indicator of economic trends: commodity prices are weak during the slowdown. A similar situation has occurred in history: before and after the global spread of the new coronary epidemic in 2020, for example, there was a downward trend in international commodity prices。
Data from the commodity trade collection on 11 july show that prices fell in 19 of the 31 commodities compared to the 1 april data before the trump government announced a reciprocal tariff. Over the same period last year, more than half of commodity prices rose。
The decline in energy-related commodity prices, such as crude oil and gasoline, was particularly marked. The future price of west texas's intermediate base crude oil (wti) was 3. 9 per cent lower than on 1 april. The price of crude oil futures, which was subject to short swings owing to geopolitical risks as a result of, inter alia, israeli attacks against iran, remains at a current rate of $60. 5 per barrel。
Despite the fact that the united states is in the middle of a free-riding season, the demand for petrol is lower than in previous years. Gas futures prices on the new york market fell by 5 per cent compared to april。
According to the chief economist of the japan metals and energy safety organization, “the peak of domestic consumption in the united states appeared on independence day in previous years, when consumption demand was lower than last year. There is a greater preference for short-distance travel and limited expenditure on petrol consumption.” it is alleged that, against the backdrop of high prices, household spending in the united states is beginning to be prudent and that high consumption for leisure and recreation has decreased。
Domestic inflation in the united states had not subsided, public efforts to reduce spending had been accompanied by a worrying trend in the world economy with the introduction of a tariff policy in trump。
Prices of agricultural products, such as soybeans, were weak. As one of the important international indicators, the price of soybean futures on the chicago futures exchange in the united states fell on 7 april to a level of $9. 6 per pip, a low point for three and a half months。
Trump announced a 50 per cent reciprocal tariff on brazil, which is the main producer of coffee beans, with the united states being the world's largest consumer. Against the backdrop of tight consumer spending, the trump government imposed tariffs on imports from brazil, which could lead to a cooling of the coffee market. Coffee bean futures prices have declined significantly。
According to sucheng, the chief grain analyst of japan, the price of agricultural products continued to decline, as marketers were concerned about declining demand for agricultural products as a result of trump's tough stance。
In the area of industrial applications, there is a growing sense of vigilance over non-metallic minerals. For example, the price of nickel used in the manufacture of stainless steel and electric car batteries is still falling. In the case of copper, which is used in the manufacture of electrical wires and household appliances, prices have also fallen slightly。
Among the major international commodities, prices are rising in precious metals. Against the backdrop of increased global economic uncertainty, demand for gold and other precious metals as “safe assets” has increased significantly。
In april this year, as one of the important international indicators of gold prices, the price of gold futures in the new york futures market (the master contract) reached an all-time high of $3,500 per ounce. At present, gold prices continue to hover at a high level of $3,300 per ounce。
Trump, on the one hand, informed several trading partners of the new tariff rates and, on the other hand, postponed negotiations until 1 august, without a clear outcome of the tariff discussions. The representative of the “market edge” company familiar with international commodity markets argued, “the trend towards risk evasion and declining demand may in the future also put downward pressure on goods other than precious metals.” (cluster/mashaun)
