Prices for commodities fall to lowest in five years
September 23, 2014 8:03 am
Commodity prices continue to fall and have declined to their lowest since the financial crisis hit markets around the world due to rising supplies, a stronger dollar, and the economic troubles of China.
A new five year low was recorded on Monday by the Total Return Bloomberg Commodities Index, a gauge that tracks 20 different commodities, when it fell to 118.2 points. It has fallen by over 12% since the end of June with China’s disappointing economic performance causing a drop in the prices of crude oil, gold, and nickel due to the country being the top consumer of raw materials in the world.
Soyabeans and other agricultural products fell on outlook for record harvests in the US while dollar denominated assets become more expensive to foreigners on the back of the strengthening dollar.
In a recent report, Barclays said that, “Without an improvement in the demand environment for commodities, a sustained, broad-based improvement in prices or investor flows seems unlikely.”
Projections for bumper crops in the US have driven soyabeans to fall by 30%, corn by 22%, and wheat by 16%. In energy, dampened demand in Asia and Europe has pressured Brent to record its lowest price in over two years at $96.64 per barrel on Monday while supplies in North America continue to increase.
Industrial metals have suffered from China’s slowing growth with nickel declining by 10% since the end of June and copper falling by 4%. Credit Suisse’s global commodities research head, Tom Kendall, claimed that, “We are seeing momentum fade in China.” Data from last week showed that factory output in the country grew at the slowest rate in almost six years during the month of August.
The material has been provided by InstaForex Company – www.instaforex.com
Commodity prices continue to fall and have declined to their lowest since the financial crisis hit markets around the world due to rising supplies, a stronger dollar, and the economic troubles of China.
A new five year low was recorded on Monday by the Total Return Bloomberg Commodities Index, a gauge that tracks 20 different commodities, when it fell to 118.2 points. It has fallen by over 12% since the end of June with China’s disappointing economic performance causing a drop in the prices of crude oil, gold, and nickel due to the country being the top consumer of raw materials in the world.
Soyabeans and other agricultural products fell on outlook for record harvests in the US while dollar denominated assets become more expensive to foreigners on the back of the strengthening dollar.
In a recent report, Barclays said that, “Without an improvement in the demand environment for commodities, a sustained, broad-based improvement in prices or investor flows seems unlikely.”
Projections for bumper crops in the US have driven soyabeans to fall by 30%, corn by 22%, and wheat by 16%. In energy, dampened demand in Asia and Europe has pressured Brent to record its lowest price in over two years at $96.64 per barrel on Monday while supplies in North America continue to increase.
Industrial metals have suffered from China’s slowing growth with nickel declining by 10% since the end of June and copper falling by 4%. Credit Suisse’s global commodities research head, Tom Kendall, claimed that, “We are seeing momentum fade in China.” Data from last week showed that factory output in the country grew at the slowest rate in almost six years during the month of August.
The material has been provided by InstaForex Company – www.instaforex.com
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