Raw materials are natural resources that are intended for processing or use, such as petroleum, wheat or metals. They differ due to their respective branches of origin in agriculture and mining, but also due to their use in the production chain, in the food sector and in industry. Specific stock indices are dedicated to them, reflecting the progress of the mining, production, processing and distribution chains.
Market downturns are often referred to as ‘corrections’. This can be problematic because it suggests that the new lower price is correct and the higher price previously was incorrect. An alternative framing would be that markets have revised their assessment of risks and rewards and come to a new price. Industrial metals have just experienced such a revision.
Continue readingProtectionism is on the rise. Driven in part by the disruptions from the war in Ukraine, countries have been more tempted to withhold flows of locally grown crops to the global market. Russia and Ukraine account for 80% of sunflower oil shipments, so disruptions to the sunflower oil trade are prompting buyers to seek alternative oils such as palm oil and soybean oil.
Continue readingThe combined effect of inflationary pressure, resulting interest rate hikes, the war in Ukraine and disrupted trade flows have raised the prospect of an economic slowdown. What might a demand slowdown mean for the metals & mining sector, where supply has been struggling to keep up with demand buoyed by a post-pandemic bounce and new demand for metals and mined commodities associated with the needs of the energy transition?
Continue readingClean energy is one of the strategic goals of European states. However, there is still a long way to go, especially since European states have long underestimated the importance of raw material supplies. Fund manager Benjamin Louvet discusses this in an interview with FONDS professionell. The energy turnaround and the strategic role of metals In the energy sector, oil played a key role for much of the 20th century. Metals could play an equally decisive role this century. The technologies neede ...
Continue readingThe London Metals Exchange (LME) is experiencing its longest period of disruption since the Tin crisis of 1985. After the International Tin Council (an inter-government-backed body) defaulted on its position in Tin in 1985, it wasn’t until 1989 that the LME resumed trading in the metal1. Trading in LME Nickel was closed for over a week in March 2022. While trading is open now, it is still disrupted.
Continue readingThe Russian invasion of Ukraine has triggered a price response across grains, oilseeds and fertilisers owing to supply disruptions. The upward trend of rising food prices was firmly in motion before we started the year owing to the COVID-induced pandemic, stockpiling by national governments and adverse weather conditions.
Continue readingThe oil market has been characterised by high volatility in recent weeks. After reaching $137 per barrel, Brent Crude from the North Sea has again fallen below the $100 mark. What are the reasons for this volatility and, in particular, the fall in oil prices? The sudden rise in oil prices since 24 February was a direct consequence of the Russian invasion of Ukraine. Russia is indeed a major oil exporter in the world. However, this growth stopped abruptly, and the gains made in the last month ha ...
Continue readingFollowing the Russian invasion of Ukraine and the subsequent sanctions imposed by the West, commodity prices have risen very rapidly. However, this increase has been going on for many months and is linked to long-term factors. The rise in prices, therefore, could continue in the coming years, regardless of when and how the war ends. Arcangelo Ròciola wrote about this for AGI, interviewing Gianclaudio Torlizzi, general manager of the financial consultancy company T-Commodity. Commodities ...
Continue readingThe sudden explosion in the price of nickel led to a historic event yesterday, Tuesday 8 March 2022: the suspension of trading on the London Metal Exchange (LME) in London. Here's a closer look at what happened. The nickel price explosion and the suspension of the LME Yesterday, during trading on the Asian exchanges, nickel broke through the incredible threshold of $100,000 per tonne for the first time. The price was out of all expectations: at the end of 2021 it was around $17,000 and jus ...
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