世界发展银行-Commodity-Markets-Outlook,-October-2019_94页_10mb

Commodity Markets Outlook Summary

Core Content

This document, titled "Commodity Markets Outlook", published by the World Bank in October 2019, provides an in-depth analysis of commodity market developments and price forecasts for major commodity groups, including energy, agriculture, fertilizers, metals, and precious metals. It also includes a Special Focus on the role of substitution in commodity demand and a Box discussing the impact of the September 14 strike on Saudi Aramco.

Main Points

Global Commodity Price Trends

• In the third quarter of 2019, almost all major commodity price indexes fell, led by energy prices, which declined by more than 8% (q/q).
• Non-energy prices also fell, with base metals and ore prices decreasing by 2%.
• Agricultural prices declined due to higher production expectations and high global stocks.
• Soybean prices rose due to China's resumption of U.S. crop purchases.

Price Forecasts

• Energy prices are forecast to average $60 / bbl in 2019 and $58 / bbl in 2020, reflecting weaker global growth expectations.
• Non-energy prices are projected to decline by 5% in 2019 and stabilize in 2020.
• Metals and minerals prices are expected to fall further in 2020.
• Precious metals prices are forecast to rise, driven by trade tensions and monetary policy loosening.

Key Insights

Substitution in Commodity Demand

• Substitution plays a critical role in commodity consumption, both within and across commodity groups.
• Historical demand surges have been accompanied by investment and innovation, which drive substitution.
• Examples of substitution:
  • Energy: Coal to natural gas.
  • Metals: Tin to aluminum, Copper to aluminum.
  • Packaging: Plastic to paper, Plastic to metal.
• Own-price and cross-price elasticities are important in understanding the impact of price changes on commodity demand.

Factors Influencing Substitution

• Technological innovation and disruptive technologies are major drivers of substitution.
• Trade policies and macroeconomic policies (e.g., exchange rate management) can influence relative prices and thus substitution patterns.
• Consumer preferences and environmental concerns (e.g., reducing plastic use) also lead to substitution.

Special Focus: The Role of Substitution in Commodity Demand

• This section highlights the long-term evolution of substitution in commodity markets, particularly in the transport and consumer goods sectors.
• Substitution is influenced by:
  • Income growth in EMDEs (especially China).
  • Price changes of substitute commodities.
  • Technological development.
• The Special Focus discusses three key episodes:
  1. Beverage can and bottle industries in the 1960s, where aluminum replaced glass, tin, and steel.
  2. Oil price shocks in the 1970s, which led to substitution from oil to coal and other energy sources.
  3. Environmental concerns and the rise of renewable energy, leading to substitution from oil to electricity.

Key Risks and Outlook

Energy

• Oil demand is expected to grow slightly in 2020, but the likelihood of further slowdown is increasing.
• Geopolitical risks (e.g., attacks on oil infrastructure) can temporarily spike prices, but long-term trends suggest price stability.
• U.S. production is expected to increase in 2020 with new pipelines.
• OPEC and its partners are expected to continue production cuts.

Non-Energy

• Metals and minerals prices are expected to fall further in 2020 due to weaker global demand.
• China's economic slowdown is a major risk for metal demand.

Agriculture

• Agricultural prices are expected to stabilize in 2020 after a decline in 2019.
• Resolution of trade tensions could boost prices for some commodities like soybeans and corn.
• Lower energy prices may reduce fuel and fertilizer costs, leading to lower prices for energy-intensive crops.

Supporting Data and Figures

• Figure SF.1 shows the longest and broadest commodity price cycle since WWII, driven by increased consumption in energy and metals.
• Figure SF.2 illustrates broad-based substitution across commodities.
• Figure SF.3 provides own and cross-price elasticity estimates.
• Figure 1 highlights global demand weakness in the third quarter of 2019.
• Figure 2 and Figure 3 show oil price developments and crude oil production.
• Figure 4 presents the oil market outlook.
• Figure 5 and Figure 6 show natural gas and coal developments and agricultural price trends.

Rights and Permissions

• The report is licensed under Creative Commons Attribution CC BY 3.0 IGO.
• Translation and adaptation of the report must include disclaimers.
• The World Bank does not guarantee data accuracy or legal status of territories.

Data Sources and Access

• Data and figures are sourced from Bloomberg, EIA, IEA, OPEC, and the World Bank.
• The cutoff date for data is October 25, 2019.
• The report and data can be accessed at: www.worldbank.org/commodities.
• For inquiries, contact: commodities@worldbank.org.

Conclusion

The Commodity Markets Outlook highlights the impact of global economic slowdowns on commodity prices, with energy and metals being the most affected. It also emphasizes the role of substitution in shaping long-term consumption patterns, driven by technological innovation, trade policies, and environmental concerns. The report serves as a key reference for understanding global commodity trends and their economic implications.