1
Commodity Market Monthly
Research Department, Commodities Team*
March 10, 2015
[Link]/commodities
Commodity prices rose by 5.5 percent in
February, the first gain in eight months, mainly
the result of a sharp rebound in oil prices. Nonfuel prices fell 2.2 percent, with declines in both
metals and agriculture, partly reflecting
appreciation of the U.S. dollarup 1.3 percent
against a broad group of currencies. The declines
also reflect slowing demand in China, particularly
for industrial commodities, and generally ample
supply conditions.
Crude oil prices surged 15.8 percent in February,
averaging $54.9/bbl, the first gain in eight months.
The increase was due to strong crude demand driven
by high refining margins in all main regions because
of robust demand for refined products and some
disruption to crude supply. Internationally traded
Brent prices jumped 20 percent to $57.9/bbl due to
a tightening market in the Atlantic basin owing to
reduced exports from Libya and Iraq because of
conflict and bad weather, respectively, and reduced
flows from Russia and the Caspian. In addition
strong demand in Asia drew crude exports eastward, and cold weather in the U.S. Northeast
disrupted east coast refinery operations and raised
product imports from Europe, particularly distillate.
In the U.S. the price of WTI only rose 7 percent to
$50.7/bbl due to a rapid stock buildup in Cushing
OK, and its discount to Brent widened to $12/bbl at
month end. High refining margins in U.S. reflect
strong product demand, up 4 percent this year, but
seasonal refinery maintenance and expanding strikes
at 12 refineries or one-fifth of the nations capacity
are limiting crude demand.
Oil prices were also supported by further large
announced cuts to upstream expenditures and
falling U.S. oil rig countdown 43 percent from
highs in October. However U.S. oil production
growth has yet to slow and global markets are
entering a seasonal decline in oil consumption and
refinery runs, the latter due to maintenance.
IMF Commodity Price Indices
(2005=100)
225
Energy
200
175
Total
150
Non-Energy
125
100
75
Jan-12
Jan-13
Jan-14
Jan-15
Crude Oil Prices
($/barrel)
130
120
Brent
110
100
Dubai
90
WTI
80
70
60
50
40
Jan-12
Jan-13
Jan-14
Jan-15
Natural gas prices in the U.S. fell by 4.3 percent in
February, and averaged $2.85/mmbtu, on ample
inventories despite strong heating demand and
record cold temperatures in eastern parts of the
country. Prices rose above $3/mmbtu late in the
month on large storage withdrawals that pulled
inventories below the five-year average, but prices
retreated in March as winter begins to wind down.
Agriculture prices fell by 2.2 percent in February,
and were down 9 of the last 10 months, owing to
ample supplies for most commodities. Meat prices
led the decline, falling 8 percent, with a 15 percent
plunge in swine prices as U.S. producers rebuild
herds from losses to a porcine virus. Beef prices
dropped 10 percent due to weak seasonal demand
and rising U.S. herd size. Lamb prices fell 4 percent
on record high exports from Australia. Fish meal
prices decreased 7 percent on an expected return to
normal production off Peru from shortfalls in 2014
*Prepared by Shane Streifel; assistance from Rachel Fan, Vanessa Diaz Montelongo, Marina Rousset
Food and Beverage Price Indices
IMF Commodity Price Indices
(2005=100)
275
Metals
250
200
Cereals
225
200
175
150
175
Vegetable
Oils & Meal
150
Agriculture
125
Beverages
125
100
Jan-12
(2005=100)
225
Meat
Jan-13
Jan-14
Seafood
Jan-15
due to high sea temperatures. Salmon prices
decreased 6 percent due to abundant Norwegian
harvests and weak demand, particularly because of
Russias food import ban. Orange prices dropped 8
percent on weak beverage demand and ample
supply. Arabica coffee prices declined 5 percent, as
rains in Brazil raised prospects of a more favorable
harvest. Wheat prices fell 5 percent due to a
continued favorable outlook for world production
and stocks. Sunflower oil and rapeseed oil declined
4 and 3 percent, respectively, owing to excess supply
and general oilseed surplus. Sugar prices fell 4
percent on improved supply prospects in Brazil.
Partly offsetting these declines, tea prices surged 10
percent on falling output in Kenya because of dry
weather. Rubber prices jumped 9 percent on falling
seasonal output in Thailand. Bananas prices rose 6
percent and reflected strong import demand.
Metals prices fell by 2.2 percent in February, down
a seventh consecutive month, due to slowing
demand growth in China, notably in the property
sector, and continued gains in supply. However,
falling prices are causing a reduction in capital
expenditures which will affect future supply, but
these are being partly offset by falling costs, notably
for energy, and depreciation of several producing
country currencies. The largest price decline was for
iron ore, down 7 percentand plunging to a third of
its 2011 highdue to surging supply that is running
ahead of demand. New low-cost iron ore supplies
from Australia and Brazil have been squeezing out
high-cost supplies in China and elsewhere, and more
new low-capacity is coming on-line this year from
earlier large investment. Tin prices fell 6 percent,
despite falling stocks, as supplies continue to exceed
expectations, with especially strong growth from
Myanmar. Lead prices declined 3 percent due to
100
Energy
75
Jan-12
Jan-13
Jan-14
Jan-15
weak seasonal battery demand and maturing e-bike
sector in China. Nickel prices fell 2 percent as stocks
continue to climb to yet record levels owing to weak
demand, while copper prices also fell 2 percent on
rising inventories and weak Chinese demand. Partly
offsetting these declines, uranium prices rose 6
percent owing to a supply disruption at a main
grinding mill in Australia.
February Commodity Price Changes
(percent from previous month)
-20
-15
-10
-5
10
15
Crude oil
Tea
Rubber
Bananas
Uranium
Olive Oil
Cotton
Groundnuts
Cocoa
Coffee Robusta
Sawnwood Hard
Aluminum
Logs Hard
Natural Gas Japan
Sawnwood Soft
Logs Soft
Hides
Shrimp
Rice
Poultry
Corn
Zinc
Soybeans
Wool Coarse
Palm Oil
Coal Australia
Soybean Meal
Soybean Oil
Copper
Nickel
Wool Fine
Natural Gas Germany
Barley
Lead
Rapeseed
Sugar
Natural Gas U.S.
Sunflower Oil
Lamb Frozen
Wheat
Coffee Arabica
Fish (Salmon)
Tin
Fish Meal
Iron Ore
Oranges
Beef
Swine
20
Table 1. Market Prices for Non-Fuel and Fuel Commodities
Units
2012
2013
2014
2014Q1
2014Q2
2014Q3
2014Q4
Jan-2015
Feb-2015
Food
Cereals
Wheat
$/MT
313.3
312.2
284.9
297.1
322.1
262.5
257.9
248.5
237.2
Maize
$/MT
298.4
259.0
192.9
210.1
213.9
173.9
173.5
174.7
173.7
Rice
$/MT
580.2
518.8
426.5
440.7
409.4
435.0
420.8
409.7
409.5
Barley
$/MT
238.2
206.4
146.1
162.7
166.9
132.8
122.0
133.0
129.8
Soybeans
$/MT
537.8
517.2
457.8
498.3
540.4
421.7
370.9
367.5
364.7
Soybean meal
$/MT
473.3
477.3
467.0
493.3
531.9
436.0
406.7
379.0
374.3
Soybean oil
$/MT
1151.8
1011.1
812.7
877.9
899.7
757.1
716.1
707.9
697.9
Palm oil
$/MT
939.8
764.2
739.4
813.7
794.7
695.9
653.3
641.6
634.4
Fish meal
$/MT
1624.3
1710.5
1921.5
1657.9
1861.6
1973.6
2192.7
2169.8
2028.5
Sunflower Oil
$/MT
1489.5
1341.1
1080.3
1133.1
1121.5
1012.5
1054.2
1004.2
960.5
Olive oil
$/MT
2963.8
3824.2
3710.4
3966.8
3812.4
3646.1
3416.1
3356.9
3515.5
Groundnuts
$/MT
1688.2
2314.5
2148.3
2377.3
2228.8
2046.8
1940.1
1951.4
2022.9
Rapeseed oil
$/MT
1239.1
1081.2
904.4
980.3
963.1
849.6
824.4
774.3
747.4
Beef
cts/lb
187.9
183.6
224.1
191.8
195.5
252.9
256.0
232.0
209.9
Lamb
cts/lb
100.9
106.7
130.6
124.1
135.4
132.8
130.2
128.6
122.9
Swine Meat
cts/lb
82.8
86.5
102.8
92.8
115.4
112.8
90.3
73.0
61.8
Poultry
cts/lb
94.3
103.8
110.1
104.7
109.0
113.0
113.9
114.1
113.8
Vegetable oils and protein meals
Meat
Seafood
Fish
$/kg
4.8
6.8
6.6
7.8
6.9
5.9
5.8
5.9
5.6
Shrimp
$/kg
10.1
14.0
16.6
17.1
17.8
17.0
14.3
15.7
15.7
Free market
cts/lb
21.4
17.7
17.1
16.8
18.2
17.7
15.8
15.1
14.5
United States
cts/lb
28.9
21.2
24.9
22.4
25.3
26.5
25.3
25.2
24.6
EU
cts/lb
26.4
26.0
27.4
27.5
28.0
27.8
26.3
25.2
25.5
Bananas
$/MT
984.3
926.4
931.9
947.1
929.2
939.3
911.9
911.6
966.9
Oranges
$/MT
868.0
967.3
782.5
777.4
838.8
774.1
739.8
758.0
700.0
Other milds
cts/lb
187.6
141.1
202.8
175.8
213.7
208.4
213.5
190.9
179.9
Robusta
cts/lb
110.6
100.5
105.6
102.0
107.9
106.0
106.6
102.3
103.7
Cocoa Beans
$/MT
2377.1
2439.1
3062.8
2951.3
3085.0
3229.2
2985.6
2915.6
2961.9
Tea
cts/kg
348.9
266.0
237.9
247.9
222.2
233.7
247.6
269.6
296.4
Logs 1/
$/M3
148.0
164.5
174.3
306.1
312.6
308.3
302.1
184.0
184.0
Sawnwood 1/
$/M3
284.7
301.4
307.3
178.4
169.7
167.4
181.5
305.7
305.7
Logs 1/
$/M3
148.0
164.5
174.3
178.4
169.7
167.4
181.5
184.0
184.0
Sawnwood 1/
$/M3
284.7
301.4
307.3
306.1
312.6
308.3
302.1
305.7
305.7
cts/lb
89.2
90.4
83.1
94.0
92.6
77.1
68.7
67.4
69.8
Fine
cts/kg
1345.3
1197.7
1074.4
1114.0
1086.0
1068.1
1029.4
967.0
946.9
Coarse
cts/kg
1212.6
1128.1
1030.4
1083.6
1058.7
1025.0
954.3
899.4
892.4
Rubber
cts/lb
153.2
126.8
88.8
102.1
96.1
83.4
73.5
75.0
82.0
Hides
cts/lb
83.2
94.7
110.2
107.6
109.8
110.8
112.6
108.8
108.8
Sugar
Beverages
Coffee
Agricultural raw materials
Timber
Hardwood
Softwood
Cotton
Wool
1/ Provisional.
2/ Average Petroleum Spot Price (APSP). Average of U.K. Brent, Dubai, and West Texas Intermediate, equally weighted.
Table 1. Market Prices for Non-Fuel and Fuel Commodities (continued)
Units
2012
2013
2014
2014Q1
2014Q2
2014Q3
Copper
Aluminum
$/MT
7958.9
7331.5
6863.4
7030.2
6795.3
6995.8
$/MT
2022.8
1846.7
1867.4
1709.3
1800.2
1989.7
Iron Ore
$/MT
128.5
135.4
96.8
120.4
102.6
90.3
Tin
$/MT
21109.4
22281.6
21898.9
22636.3
23146.2
Nickel
$/MT
17541.7
15030.0
16893.4
14661.0
Zinc
$/MT
1950.0
1910.2
2161.0
2026.5
Lead
$/MT
2063.6
2139.7
2095.5
$/lb
48.9
38.5
Spot Crude 2/
$/bbl
105.0
U.K. Brent
$/bbl
112.0
Dubai
$/bbl
West Texas Intermediate
2014Q4
Jan-2015
Feb-2015
6632.3
5830.5
5729.3
1970.4
1814.7
1817.8
74.0
67.4
62.7
21915.2
19897.9 19454.1
18233.9
18467.8
18584.2
15860.5 14849.2
14573.8
2071.4
2310.7
2235.3
2113.0
2097.8
2101.4
2097.1
2182.4
2000.9
1843.1
1795.7
33.5
35.2
30.0
31.1
37.7
36.0
38.1
104.1
96.2
103.7
106.3
100.4
74.5
47.5
54.9
108.8
98.9
107.9
109.8
102.1
76.0
48.4
57.9
108.9
105.4
96.7
104.4
106.1
101.5
74.6
46.3
56.2
$/bbl
94.1
97.9
93.1
98.8
103.1
97.6
73.1
47.6
50.7
Russian in Germany
$/mmbtu
12.0
11.2
10.5
10.8
10.7
10.1
10.3
9.5
9.3
Indonesian in Japan
$/mmbtu
18.1
17.3
17.0
17.8
17.6
16.5
16.1
16.0
16.0
US, domestic market
$/mmbtu
2.8
3.7
4.4
5.2
4.6
3.9
3.8
3.0
2.8
103.2
90.6
75.1
82.6
77.9
72.7
67.4
66.5
65.8
Metals
Uranium
Energy
Natural Gas
Coal
Australian, export markets
$/MT
1/ Provisional
2/ Average Petroleum Spot Price (APSP). Average of U.K. Brent, Dubai, and West Texas Intermediate, equally weighted.
Table 2. Indices of Primary Commodity Prices
(2005=100, in terms of U.S. dollars) 1/
(Weights) 1/
2012
2013
2014
2014Q1
2014Q2
2014Q3
2014Q4
Jan-2015
Feb-2015
100.0
186.3
183.3
171.8
182.2
184.7
174.9
145.5
114.9
121.3
36.9
171.0
169.0
162.2
167.2
168.4
160.8
152.6
145.7
142.5
Agriculture
26.2
162.8
163.3
161.5
165.7
169.6
158.6
152.0
147.9
144.6
Food
16.7
175.6
177.6
170.1
176.6
181.1
165.6
157.2
153.0
147.3
Cereals
3.6
236.4
218.3
180.3
191.2
198.3
167.5
164.3
161.9
157.9
Vegetable oils and protein meals
4.4
215.6
206.4
190.4
203.6
211.7
178.9
167.4
162.9
161.1
Meat
3.7
133.3
136.8
160.5
143.4
156.7
175.4
166.4
150.8
138.1
Seafood
Beverages
Agricultural Raw Materials 3/
Timber
Metals
3.2
1.8
7.7
3.4
10.7
113.3
167.4
134.0
107.4
191.0
160.1
147.4
136.2
107.3
182.9
162.0
178.0
138.8
109.3
164.1
185.9
167.9
141.4
109.9
171.1
171.2
181.0
141.9
111.1
165.3
150.0
183.3
137.7
109.8
166.1
141.0
180.0
134.1
106.4
154.0
147.5
172.6
131.0
105.2
140.3
140.3
173.3
132.1
105.6
137.3
Edibles 4/
Industrial Inputs 5/
18.5
18.4
174.8
167.1
174.6
163.3
170.9
153.5
175.7
158.6
181.1
155.5
167.3
154.2
159.4
145.7
154.9
136.4
149.8
135.1
63.1
53.6
6.9
2.6
195.2
197.9
171.2
202.1
191.7
195.9
164.9
176.8
177.4
181.1
160.0
149.1
190.9
195.2
168.5
163.4
194.3
200.0
164.5
154.5
183.2
188.9
153.4
144.4
141.4
140.2
153.5
134.2
96.9
89.2
144.4
131.2
108.8
103.5
142.4
130.5
All Primary Commodities 2/
Non-Fuel
Energy 6/
Petroleum 7/
Natural Gas
Coal
1/ Weights based on 2002-2004 average world export earnings.
2/ Non-Fuel Primary Commodities and Energy Index.
3/ Includes Forestry Products.
4/ Edibles comprised of Food and Beverages
5/ Industrial (Non-Fuel) Inputs comprised of Agriculture and Metals
6/ Includes Petroleum, Natural Gas and Coal.
7/ Average Petroleum Spot Price (APSP). Average of U.K. Brent, Dubai, and West Texas Intermediate, equally weighted.
Commodity Prices in U.S. Dollars, 2005-2014
Coal ($/ton)
Crude oil ($/bbl)
200
150
125
150
Australia
100
100
75
50
South Af rica
0
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
50
25
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
Natural Gas ($/mmbtu)
20
Aluminum ($/ton)
3500
3000
15
Japan
2500
10
Germany
5
2000
1500
United States
0
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
1000
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
Copper ($/ton)
Lead ($/ton)
10000
4000
9000
3500
8000
3000
7000
2500
6000
2000
5000
1500
4000
1000
3000
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
500
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
Nickel ($/ton)
Zinc ($/ton)
60000
4500
50000
4000
40000
3500
3000
30000
2500
20000
10000
0
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
2000
1500
1000
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
Commodity Prices in U.S. Dollars, 2005-2014 continued
Bananas ($/ton)
3500
Beef (cents/pound)
275
250
3000
225
2500
200
175
2000
150
1500
125
1000
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
100
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
Cocoa ($/ton)
Coffee (cents/lb)
4000
350
3500
300
Arabica
250
3000
200
2500
150
2000
100
1500
50
1000
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
0
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
Logs ($/cubic meter)
Cotton (cents/pound)
250
Robusta
500
200
400
150
300
Hard
100
200
Sof t
50
0
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
100
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
Maize ($/ton)
350
300
Palm oil ($/ton)
1300
1100
250
900
200
700
150
100
50
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
500
300
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
Commodity Prices in U.S. Dollars, 2005-2014 continued
Rice ($/ton)
1200
Rubber ($/lb)
300
250
1000
200
800
150
600
100
400
50
200
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
0
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
Shrimp ($/kg)
Soybeans ($/ton)
20
1500
18
1250
Soybean oil
16
1000
14
750
12
Soybeans
500
10
250
8
6
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
0
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
Sugar (cents/pound)
Tea (cents/kg)
30
400
25
350
20
300
15
250
10
200
5
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
150
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
Wool (cents/kg)
Wheat ($/ton)
500
2000
1750
400
Soybean meal
Fine
1500
1250
300
1000
200
750
Coarse
500
100
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
250
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
Commodity News Highlights
Medium Term Oil Market Report 2015 Summary, International Energy Agency. February 2015.
After years of relatively stable, record-high prices, the oil market collapsed by roughly 60% from its June 2014
high above $115/bbl for Brent to below $46/bbl in January. The drop came on the heels of a pronounced
slowdown in demand growth and record advances in non-OPEC supply. In November OPEC surprised the market
by keeping its production target unchanged in the face of falling revenues and rising non-OPEC supply. Market
rebalancing will likely occur relatively swiftly but will be comparatively limited in scope, with prices stabilizing at
levels higher than recent lows but substantially below the highs of the last three years. The dramatic inventory
build of the last few months grinds to a halt as early as mid-2015, and the market starts tightening appreciably,
with a steady and gradual increase in the nominal Call on OPEC, from 2016 onwards.
The recent price decline is expected to have only a marginal impact on global demand growth for the remainder
of the decade. Projections of oil-demand growth have been revised downwards, since the price drop, in line with
IMF economic forecasts, with demand growth slowing markedly to 1.1 mb/d per annum over the next six years.
Oil exporting economies will for the most part be adversely affected by the oil price drops, with the notable
exception of Gulf Cooperation Council countries with large enough buffers to absorb the impact of the revenue
shortfall. Russia, where international sanctions will compound the effect of plummeting fiscal and export
revenues, will be particularly hard hit. For most oil importers, the benefit of rising disposable income and lower
production costs will be partly offset by underlying problems in the broader economy. Mature OECD markets
will see protracted contraction in oil demand in the years to 2020, extending earlier trends. But the rest of the
world is no longer expected to provide as strong an offset as in the past. Renewables and natural gas are
increasingly price-competitive against oil and coal in emerging markets and will continue to encroach on oil
consumption. Non-OECD oil demand is only expected to grow by 1.19 mb/d annually in the years to 2020.
Supply-capacity growth looks significantly lower than expected in the years to 2020 as lower prices slash
investments. However, global capacity is still expected to increase to 103.2 mb/d over the next six years, a 5.2
mb/d gain. Two thirds of this growth will come from non-OPEC producers. Despite OPECs stated policy of
defending market share, its own crude capacity is only projected to gain 1.2 mb/d, an average of 200 kb/d per
annum. Iraq alone accounts for almost all of the increment, as other producers curtail spending or struggle with
low prices and security issues. Non-OPEC supply is forecast to reach 60 mb/d by 2020, with growth slowing to an
average annual 570 kb/d. That growth rate is far below the record gains of 1.9 mb/d in 2014, and down from an
average 1 mb/d in 2008-13. Remarkably, US LTO is expected to remain a top source of incremental supply, with
growth initially slowing to a trickle but swiftly regaining momentum later on, bringing production to a projected
5.2 mb/d by 2020. Although questions remain about the availability of capital to LTO producers on the rebound,
on balance LTO investment cutbacks are not expected to have as long-lasting an impact as other spending cuts.
Russia, facing a perfect storm of collapsing prices, international sanctions and currency depreciation, will likely
emerge as the industrys top loser. Its production now looks set to contract by 560 kb/d from 2014 to 2020.
Other cuts will target big-ticket items, such as high-cost deep-water projects in West Africa and elsewhere, as
well as routine field maintenance as producers seek to squeeze as many barrels as possible from producing
fields, resulting in faster decline rates later on. That will leave North American unconventional production
looming even larger in total supply than previously thought. The transformative impact of US LTO supply does
not derive just from the sheer production volumes it has unlocked, but also looks set to stand out by its
responsiveness to lower prices. Its short lead and pay-back times, rapid well-level decline rates and treadmilllike investment requirements make it far more price elastic than conventional crude.