(FS.5.03) Commodity Markets

The Rand would typically be expected to underperform in an environment where global stock markets and commodity prices are deep in the red, as is currently the case owing to growing expectations that the Coronavirus outbreak in China will hit economic activity in the world's second-largest economy.
The COVID-19 pandemic, along with lower commodity prices and volatile financial markets, will have severe implications for the global economy and Indonesia this year: Domestic demand is expected to weaken, as business and consumer sentiment wanes.
In addition to all values, there is a mounting evidence of sharp declines in tourism, supply chain disruptions, weak commodity demand, and falling consumer confidence.
There is mounting evidence of sharp declines in tourism, supply chain disruptions, weak commodity demand and falling consumer confidence.
BHP expects metals and bulk commodities could make up for volumes lost during the coronavirus disruption in the balance of 2020, so long as there's a brisk recovery in China's construction and manufacturing sectors next quarter.
Investors and commodity traders are growing more hopeful the global economy will avoid a recession in 2020, which would support faster growth in oil consumption over the next 12-18 months.
A sharp slowdown in global growth is expected in the first half of 2020 as supply chains and commodities are hit by the coronavirus, tourism drops and lower confidence grows.
Even in the best-case scenario of limited coronavirus outbreaks in countries outside China, a sharp slowdown in world growth is expected in the first half of 2020 as supply chains and commodities are hit, tourism drops, and confidence falters.
Global commodity prices are falling, with oil down by 18 percent since the start of the year amid indications that Chinese demand will fall by 25 percent this month.
Investors erased US$ 393 billion from China's benchmark stock index on Monday, sold the Yuan and dumped commodities as fears about the spreading coronavirus and its economic impact drove selling on the first day of trade in China since the Lunar New Year.
Low oil and commodity prices and weak developed economies will dampen tech demand in Eastern Europe, the Middle East and Africa in 2020 and especially 2021.
Expect prices for most commodities to rise in 2020 on inflation concerns triggered by a tight labour market and high oil prices possibly caused by a rise in geopolitical tensions in the middle east between Iran and Saudi Arabia.
Hesitancy in the global market in 2019 has meant a decline in appetite for Canadian energy and commodities, with a 3.9% decrease in the industry, a downward trend that looks as if it will continue into 2020.
With commodity prices remaining broadly stable, commodity exporters are expected to see modest recovery in growth, while large oil discoveries and the start of their production in 2020 is expected to boost growth in Guyana.
Sub-Saharan Africa: Regional growth is expected to pick up to 2.9% in 2020, assuming investor confidence improves in some large economies, energy bottlenecks ease, a pickup in oil production contributes to recovery in oil exporters and robust growth continues among agricultural commodity exporters.
Sub-Saharan Africa's growth is expected to improve to 2.9% this year, assuming investor confidence improves in some large economies, energy bottlenecks ease, a pick up in oil production contributes to a recovery in oil exporters and robust growth continues among agricultural commodity exporters.
Things could rebound for the commodity market in 2020 on improved global demand and a preliminary level trade deal between the United States and China.
Recoveries in the developed world are predicted to remain fragile in the next few years, while commodity prices are expected to slide, at least in the near term.
Protracted trade tensions are expected to negatively affect the outlook for major agricultural commodities while the prices of precious metals, such as gold, will likely benefit from heightened uncertainty in and weaker prospects of the global economy.
The market earlier rose about 1% after OPEC pointed to a smaller surplus in the oil market next year although it still expects demand for its crude to drop as rivals pump more.
Indonesia's economic growth is expected to slow to 4.9 percent in the third quarter of this year as weak global demand affects trade and weakens manufacturing industry, while commodity prices continue to decline.
The WTO predicts a further slowdown of global trade growth in 2019, while the Baltic Dry Index, a bellwether trade metric based on shipping rates for dry bulk commodities, has nearly halved in value since the beginning of the year.

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Last updated: 26 May 2020