The CRB index finished the New Year's Eve session with a discount by 1.51%, sealing the inheritance 2014 on the commodity markets. In the whole past year the index discount was almost 18% - and such a result does not surprise, given the clear price reductions of most raw materials and goods.
Energy raw materials lead to inheritances
The most important component in the CRB index is crude oil, and it was the price of this raw material that was the most important thing to bring down the quotations of this aggregate. The price of U.S. WTI oil (West Texas Intermediate) fell by almost a year ago 44%, and European Brent oil has been discounted even more because about 47%.
On the other hand, economic problems of many countries, including the euro area economy and China, raised concerns about the state of demand for oil. These factors continue to affect supply pressures on oil prices.
If first The price of oil was relatively stable in the middle of the previous year, and in June, a dynamic price descent began on this market, due to concerns oversupply of oil in the global market. On the one hand, such suppositions have resulted in steadily increasing shale oil production in the US, combined with large extraction in the Middle East and West Africa.
On the other hand, economic problems of many countries, including the euro area economy and China, raised concerns about the state of demand for oil. These factors continue to affect supply pressures on oil prices.
The supply side did well last year also in the markets of many other raw materials. The price of natural gas in the USA has fallen by 33%. Although the price of gas increased sharply in January and February, later months resulted in a recovery, and in December the quotations peaked downward due to the warm winter in the US and thus, lower demand for gas.
Weak year in metal markets
The past year was also not good in metal markets. Although many industrial metals were doing well, the most popular of them – copper – recorded systematic sales. In 2014 New York copper contracts have been overrated 16%. Cause? Mostly concerns about China's economy. GDP dynamics in this country is impressive compared to the US or Europe, but disappointing compared to earlier years. This naturally raises concerns about demand for copper because China consumes more than 40% the global supply of this raw material.
Also in the markets of precious metals last year the red color prevailed. The gold notes managed to avoid deep declines noted in 2013 and eventually in 2014 the price discount of yellow gold was only less than 3%. However, silver and platinum have been discounted much more strongly (by 21% and 14%).
The palladium, on the other hand, ended the past year for 9% plus the fundamental situation on the metal market: a high demand, mainly from the automotive industry, with a low supply and concerns about its reduction by the largest producer - Russia.
Oversupply of pests on agricultural commodity markets
The past year has also brought differentiated price movements in the markets for agricultural goods. The leader of the raise was the arabica coffee, which rose to about 52%. The price increase in cocoa prices is modest. 8%.
However, most of the agricultural goods ended the past year on the downside. Soya was overrated by over one fifth, However, the decrease in the prices of the remaining cereals was no longer so dynamic – the maize prices fell by 6%, and the price of wheat ended the year at a similar level as it started. Due to global oversupply, cheap cotton (-29%) and sugar (-12%).