The outlook for global commodity markets is characterised by an improved supply landscape and subdued demand, easing market pressures. Weaker manufacturing activity in major economies is set to limit energy and metals price growth, while favourable crop projections should temper agrifood prices. Looking ahead, disinflation and monetary easing may boost consumption and business activity, adding upward pressure on commodities, while geopolitical and weather shocks could exacerbate volatility.
This report comes in PPT.
Global production of key agricultural commodities is projected to be robust in 2024 and 2025, on the back of mostly favourable growing conditions and improved productivity. Adequate supplies coupled with still moderate demand are expected to limit price growth. However, potential supply disruptions and extreme weather are key upside risks.
Global energy supply is forecast to grow, while softer economic activity, especially in China, is set to weigh on demand, easing pressures in the global energy markets. Rising energy efficiency and renewables adoption will further curb consumption, capping price rises. However, geopolitical tensions, more resilient global economy and OPEC+ supply cuts are major risk factors that could exacerbate volatility in the energy markets.
Growth in production of key metals has been limited due to economic uncertainty and weaker B2B demand. However, an anticipated economic rebound amid monetary easing in advanced economies is likely to support growth. Moreover, the accelerating green transition will support higher demand for metals used in the production of electric vehicles (EVs), solar panels and power grids. However, China’s real estate sector woes remain a key concern.
Heightened geopolitical risks and tensions continue to pressure global commodity markets and exacerbate volatility. Challenges like supply chain disruptions, trade restrictions and global fragmentation, production cuts and shifts in market confidence could intensify uncertainties and drive fluctuations in commodity prices.
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