Thursday’s figure of nearly 3.3 million set a grim record. “A large part of the economy just collapsed,” said Ben H… https://t.co/aNB36p7Y2A
Weekly Pricing Pulse: Commodities hit by trade again
The negative sentiment surrounding trade continued to impact materials prices last week. Oil, non-ferrous metals and fibre prices all struggled under fears of weakening demand, pulling our Material Price Index (MPI) 0.4% lower.
Although conflict in key oil producing regions is providing price support, Brent crude suffered a rout last week falling 6% to $68 /bbl as concerns over near-term oil demand growth and data showing higher US inventories took their toll. Non-ferrous metals prices, a recent bell-weather for trade-war sentiment, tumbled 1.4%, their ninth straight weekly decline. Fibre prices too, have struggled in the face of trade issues and fell 3.0%, their fifth consecutive weekly decline. In contrast, ferrous prices jumped 1.5% last week with spot iron ore prices exceeding $100 /t for the first time in five years. Iron ore shipments into China slowed to an 18-month low in April even as Chinese steel production hit a record level, pointing to a possible increase in demand for deep sea cargoes.
This past week, trade concerns were further stoked by the US saying that it was not ready to make a deal with China. This coincided with data released indicating Chinese industrial profits had fallen 3.7% y/y in April, a trend that began in November 2018, and in line with weak industrial production performance year-to-date. With supply-side issues in oil and ferrous markets stripped away, the fate of the MPI will remain tied to the swings in sentiment tied to trade.
- Capital Markets Weekly: Risk of multiple emerging-market defaults increasing
- Weekly Pricing Pulse: Commodities sell off as the shut-downs continue
- Capital Markets Weekly: Market volatility to remain severe amidst flight to cash
- COVID-19 Impact Update: US GDP to plunge to -13% in Q2, unemployment approaching 9.0% by December
- Weekly Pricing Pulse: Commodities drop sharply as the global economy shuts down
- The global economy: Headed for recession
- COVID-19 to precipitate US recession in 2nd quarter
- Fed does not dither: Aggressive monetary policy response to COVID19