HWWI-Rohstoffpreisindex steigt weiter zum Ende des Jahres
- HWWI overall index increased by 11.3 % (US dollar basis)
- Crude oil prices rose by 13.7 %
- Iron ore prices increased by 23.6%
(Hamburg, January 15, 2021) The HWWI commodity price index continued to rise in December by an average of 11.3 % compared to the previous month and was 10.8 % below the corresponding monthly value of the previous year. The global start of the Corona virus vaccinations raised hopes for an economic recovery in 2021 and led to significant price increases on almost all commodity markets. Crude oil prices continued to recover, additionally supported by the stabilising measures of OPEC+. The markets for industrial commodities were also characterised by strong demand from China in December and continued to record significant price increases. In particular, the rapid development of steel production in China drove up iron ore prices. On the grain markets, prices rose due to tight supply as a result of droughts in the harvesting regions and a simultaneous increase in demand from Asia.
Index for energy raw materials: +11.6 % (Euro basis: +8.6 %)
The prices for the crude oil types included in the index continued to rise in December. At the end of the year, prices for the European reference Brent crude stood at $52 per barrel and prices for the American reference WTI crude at $49 per barrel. Compared to the previous year, average crude oil prices in December continued to trade more than 20 % below the average December values for 2019. As Corona infections rose significantly again worldwide and lockdown measures were tightened again, particularly in Europe, uncertainties on the crude oil markets increased in December. In contrast, the start of vaccination against the Corona virus at the end of December had a stabilizing effect on prices, strengthening hopes that the pandemic would end soon, and that the global economy would recover despite the current rise in infections. Since a recovery of the world economy is accompanied by an increase in demand for crude oil, the oil price already rose in December. The agreement reached by OPEC+ countries in the first week of December to continue to stabilise oil prices and to reduce planned production increases in the new year also supported prices. The announcement by the OPEC+ alliance that it would regularly review the situation on the oil market in the course of a monthly meeting and, if necessary, adjust production volumes, also had a stabilizing effect on prices.
After the sharp drop in coal prices caused by the temporary industry shutdown due to the global lockdown to combat the Corona crisis in spring, international coal prices recovered at the end of the year, exceeding the average December values of the previous year. The price of Australian coal rose by an average of 24.6% from the previous month, while the price of South African coal increased by 25.9%. The rise in coal prices was due to strong demand from Asia, especially China, and tightening global supply. Coal supply was lower in December as low prices in the spring forced some coal mines, e.g. in Colombia, to close. The increase in demand from China, on the other hand, can be explained by the economic upturn and the cold weather at the end of the year. In addition, the demand side was influenced by the ongoing conflict between Australia and China. Political relations between Australia and China have been strained since the Australian government called for an investigation into China’s handling of the Corona pandemic. As a result, China has restricted imports from Australia, most recently coal. To meet increased Chinese demand, for which domestic production is insufficient, Chinese traders have increased demand for South African coal, leading to price increases. Despite the lack of Chinese buying, Australian coal prices also rose in December. The increase in South African coal prices resulted in Australian coal being sold in other markets such as Bangladesh, Turkey and India.
European and US natural gas prices moved in opposite directions in December. While European natural gas prices rose at the end of the year, US natural gas prices fell on average in December compared to the previous month. Both reference prices in December were significantly above the December values of the previous year.
Overall, the energy commodities sub-index rose by 11.6 % (Euro basis: +8.6 %) to 96.9 points (Euro basis: 88.4 points).
Index for industrial raw materials: +13.6 % (Euro basis: +10.5%)
The sub-index for industrial commodities is divided into the index for agricultural commodities, the index for non-ferrous metals and the index for iron ore and steel scrap. All commodities included in the industrial raw materials index recorded price increases in December compared to the previous month. The industrial raw materials index was over 34% higher in December than in December 2019.
Prices for industrial metals were at a high level at the end of the year, far above previous year’s level. The rapid recovery of the Chinese economy, supported by government stimulus programs, was accompanied by strong consumption of industrial raw materials. In addition, mine closures due to lockdown measures caused supply shortages, e.g. for copper, zinc and nickel. Prices for iron ore and steel scrap rose particularly strongly in December, reflecting the strong growth in Chinese steel production. Iron ore prices in December were even more than 60 % above the average value of the corresponding month of the previous year. In addition to strong demand from China, the global vaccination start had a price-stabilising effect on prices for industrial raw materials as well.
The rapid recovery of the Chinese economy also strengthened demand for textile raw materials, which was reflected in rising prices on the markets for cotton, wool and skins.
Supply shortages were also observed in the cotton markets due to droughts in the harvesting regions. The average price of cotton in December was 10% higher than the December average for 2019.
Overall, the index for industrial raw materials rose by an average of 13.6 % (Euro basis: +10.5 %) to 165.4 points (Euro basis: 150.9 points) in the month.
Index for food and beverages: +3.5 % (Euro basis: +0.7 %)
The price increase on the food and luxury food markets continued in December. The three sub-indices for grains, luxury foods, and oilseeds and oils increased on average in December compared to the previous month.
The grain markets continued to see high import demand in December, especially from China. Droughts in the major growing regions reduced the supply of wheat, maize and soybeans. Due to the high wheat prices, Russia, the world’s largest wheat exporter, announced in December that it would regulate wheat prices in the future. Russia’s announcement led to further price increases on global wheat markets.
Prices for vegetable oils such as soybean, coconut and palm oil also continued to rise sharply in December, again reflecting poor harvests and tighter supplies due to production constraints in producing countries. Lockdown measures imposed to combat the Corona pandemic led to labour shortages and supply difficulties of crop fertiliser in producer countries. In addition, global demand for vegetable oils to produce biofuel alternatives increased.
Contrasting developments were observed in the markets for luxury foods in December. While coffee and cocoa prices continued to rise in December, sugar and tea prices fell. The continuing rise in coffee prices can still be explained by the unfavourable growing conditions in Brazil, the largest producing country. Colder temperatures and droughts led to a weak harvest and drove up prices. Only the prices for sugar and tea fell on average in December compared to the previous month, but both prices remain above the average price in December of the previous year.
Overall, the index for food and beverages rose by an average of 3.5 % for the month (Euro basis: +0.7 %) and stood at 111.6 points (Euro basis: 101.8 points).
Quelle: www.hwwi.org