The bullish market structure of major global commodities is somewhat divided

Since the beginning of this year, the global major commodity market in the overall warming, while the market structure has been divided.Metal prices overall cooling, black and non - ferrous metal prices continued to divide;Agricultural prices remained relatively stable, showing a slight upward trend.Looking ahead to the second half, global commodity prices as a whole will continue to rise modestly -
Since the beginning of this year, due to factors such as world economic recovery, trade friction escalation and geopolitics, the market structure of major global commodity markets has been divided while the overall temperature has risen.Oil and other energy commodities have continued to rise significantly this year, following a 28 per cent jump last year.Metal prices overall cooling, black and non - ferrous metal prices continued to divide;Agricultural prices remained relatively stable, showing a slight upward trend.In the second half of the year, global commodity prices as a whole will continue to rise moderately, but the differentiation of different products will remain the same."Faster global growth and higher demand are important factors driving up prices for most commodities and bullish expectations for future commodities," said chantayanan devarajan, acting chief economist at the world bank.
The big surge in energy prices is geopolitical
Since January, international oil prices have risen in shock, and have more than doubled their lows in early 2016.Opec's monthly oil market report showed that the average price of a basket of Opec oil prices in June was $68.43 a barrel, up 36% from the start of the year.Brent was $71.16 a barrel at the same time, up 35.1 percent from a year earlier, while west Texas was $65.46 a barrel, up 31.1 percent.Three major international crude benchmark prices have all recorded increases of more than 30%.Second, the global economic recovery boosted oil demand;Third, the United States pulled out of the nuclear deal and threatened to escalate sanctions against Iran.
The international oil market will maintain a tight balance between supply and demand.Opec forecasts oil demand for 98.85 million barrels a day this year, up 1.65 million BPD from last year, and will continue to increase in 2019, possibly exceeding the 100 million BPD mark for the first time.Demand for crude oil has risen steadily in Asia, Latin America and the Middle East.On the supply side, non-opec countries produced 59.54 million barrels a day this year, 2 million more than the previous year, and will continue to do so next year, mainly by the United States, Brazil, Canada, Australia, kazakhstan and the United Kingdom.Opec's 15 members have produced 32.33 million barrels a day this year.Venezuela, Latin America's leading producer, has seen its crude output shrink as its economy struggles.Crude oil production fell to 1.52 million BPD in the second quarter from 1.62 million BPD in the first quarter, significantly lower than last year, data showed.The increased production in Libya and Nigeria, as well as shale oil, was faster than expected and could help ease international oil market tensions.
For some time to come, geopolitics will be the main factor affecting oil prices.The price of oil will rise sharply if the balance of international oil markets is disrupted by escalating U.S. sanctions on Iran and curbs on Iranian crude exports.Iran produced 3.81 million barrels a day in the first half of this year, mostly for export, mainly to east and south Asian countries.Recently, the United States and Iran have a bad relationship, mutual hatred.The United States has threatened to block Iranian oil exports, while Iran has threatened to block the strait of hormuz and cut off shipping routes to gulf countries including Saudi Arabia, Kuwait, the united Arab emirates and Iraq.This would have "catastrophic" consequences for international energy markets.
Metal market continues to divide supply and demand balance to form
The price trend of black metal and non - ferrous metal continues to diverge, is the most important feature of metal price this year.The drop in iron ore prices largely offset the strength of other commodities, with metal prices generally cooling.At present, the global iron ore market presents the pattern of supply oligarchy and concentrated demand.Vale, Rio tinto, BHP billiton and FMG offer more than 70 per cent of the world's iron ore trade, and China, the world's largest consumer of iron ore, has been the dominant factor in the move.At present, the rapid rise of global iron ore demand has ended with the slowdown of China's demand, and the international iron ore supply and demand pattern has entered a new stage. It is difficult to change the phenomenon of oversupply in the short term.In July, 58 percent of the dry base ore reached shore at $52.52 per ton, 10 percent lower than the monthly average price of $57.99 per ton in January.The world bank's commodity market outlook forecasts that the average price of iron ore in 2018 will fall by 18.6 per cent from 2017.
The fall in iron ore prices has spurred increased steel consumption in some countries.The government has set a target of 300 million tonnes of crude steel a year and plans to invest 10 trillion rupees in capacity expansion by 2030.In the first six months of this year, the world's crude steel production was 88.15 million tons, up 4.6% year on year, increasing output by 39.1 million tons, according to cisa.In June, global crude steel capacity utilization rate was 78.5%, up 3.8 percentage points year-on-year and 1.0 percentage points month-on-month.
In nonferrous metals, the international copper research group (ICSG) sees global copper capacity growth falling back to a low of around 2.7 per cent in 2018, with copper prices set to edge up after the current expansion.The world copper market fell short by 197, 000 tonnes in the first half of this year, far more than the 65, 000 tonnes shortfall seen in the copper market last year and up sharply from the 69, 000 tonnes recorded for all of 2016, reflecting a widening supply gap.The world bank forecasts copper to average $6,118 a tonne this year, up a modest 1.1 per cent from 2017.
Aluminium and copper are similar.China's production growth will slow further and the supply gap will be amplified as the world's largest producer destocks and decapacity increases.According to rusal, the global aluminum market supply shortage will expand to about 1.7 million tons in 2018 from 1.3 million tons in 2017, and there is an upward momentum for aluminum prices.The world bank forecasts that the average price for aluminum this year will be $1968 a tonne, up a modest 0.9 per cent from 2017.Market supplies of lead, nickel and tin were in short supply in the first half of the year, which will continue to drive nonferrous metal prices higher, WBMS data showed.Gold prices fell as us and European partners tightened policy, with the world bank forecasting a modest 1.0 per cent fall in 2018.Gold demand has been weak so far this year. In the second quarter, gold demand dropped to 964.3 tons, the lowest since 2009.
Overall stable food supply demand moderates price pressure
At present, the global population growth rate shows a further downward trend. As the demand growth of major emerging economies slows down, per capita consumption of staple food tends to be saturated, the global demand for agricultural products and food slows down, while the supply side remains stable.The 2018-2027 agricultural outlook, an annual report jointly prepared by the oecd and the UN's food and agriculture organisation, shows that most global agricultural production will grow steadily, with most grain, meat, dairy and fish production at record levels, with grain inventories at record levels.However, some countries are suffering from poor harvests and shortages of supplies because of bad weather, such as floods or droughts.The outlook predicts that prices of major agricultural products will remain low for the next decade, driven by supply and demand.
Global wheat production has increased for five consecutive years, with inventories now at 268m tonnes, according to the data.Soybean and rice are still in the pattern of producing more than needed, with the current inventory of 98.32 million tons and 141 million tons respectively.Affected by the low price in recent years, the planting area of corn decreased, the yield decreased, the fundamentals changed from production over demand to production under demand, and the ending inventory decreased significantly by 10%.In addition, as corn can be used as raw material for industrial ethanol, the price of crude oil in the international market moves upward, which is positive for the price of corn.Experts point out that the fundamentals of supply and demand of most agricultural products are relatively loose.Corn and other varieties of a slightly tight relationship, prices may rise seasonally.