FXEMPIRE
All

Overview of Commodities, 2018

Commodities entered 2018 on a hawkish sentiment, however, since then the market has trended lower, with trade wars and other factors affecting commodities’ prices.
FX Empire Editorial Board
Commodities Cargos

The raw materials sector was marked in 2018 by the sell-off in the oil market, with the WTI Crude and Brent futures falling significantly since last October, from a year, futures on the oil market benchmark have already fallen close to 40 percent. The speculative upward rally in black gold prices since March has fallen by the wayside, notably by the record US shale oil production that has been hitting scraps almost every week, bringing the US economy to the throne of major world oil producers. The trade dispute between the two largest economies also ended up with a strong price resistance, at a time when the market had been largely supported by the announcement of US sanctions on Iran.

Regarding metals, aluminum was the highlight in 2018. The sanctions imposed in April by Donald Trump on the Russian oligarch, Oleg Deripaska, owner of Rusal – one of the world’s largest producers – London Metal Exchange futures more than 25 percent to near $ 2600 / t. However, everything went through a bluff, with the United States already agreeing to withdraw the sanctions in exchange for Deripaska to reduce its influence on Rusal, stabilizing the price around previous levels near 2000 $ / ton.

Regarding agricultural raw materials, soybeans were in the spotlight because of the trade conflict between the United States and China. After Trump announced mid-year import tariffs on US soybeans, futures in Chicago fell nearly 20 percent, prompting China to seek other suppliers to power its processing machine of soybean meal. Brazil ended up being the great beneficiary of this situation, since its neighbor to Argentina, went through a period of drought which led to significant reductions in its production. After the last negotiations between Washington and Beijing, Trump came to mention ten days ago that he had assurances from President Xi Jinping that China will resume buying American soybeans, yet US farmers have yet to see any progress in this matter.

This article was written by Francisco Quadrio Monteiro 

Disclaimer: Materials, analysis, and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. The author’s opinion does not represent and should not be construed as a statement or investment advice made by TeleTrade. All Indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US