How China’s demand expectations impacted commodities last week

May 30, 2022 06:55 PM AEST | By Arpit Verma
Follow us on Google News:


  • The prices of both crude oil benchmarks witnessed a spike last week.
  • Precious metals gold and silver also logged significant gains last week.
  • Coal has also recorded a bull run, as its prices gained more than 5% last week.

Prices of most of the commodities recovered last week. The ease in COVID-19 related restrictions in China, coupled with strengthening market fundamentals and robust demand for commodities against a tightening market backdrop has triggered a rally in the global commodity market.

In the energy domain, the prices of Brent crude oil benchmarks gained more than 4% while WTI crude oil futures logged a weekly jump of 5.83%. Both crude oil benchmarks exchanged hands over US$115/bbl on Friday. A significant jump in both crude oil benchmarks was witnessed as investors weighted an expected demand recovery in China. Not only crude oil, natural gas prices also surged as much as 8.04% last week due to robust demand and lower inventories.

Also Read:Crude oil surges to 14-year highs on delays in Iranian talks 


Image source: © 2022 Kalkine Media®

The benchmark Newcastle coal futures also consolidated near US$406/tonne on Friday, supported by a strong demand against a tightening market backdrop. Though the prices of coal dropped 2.4% over the last week, the commodity has recorded substantial gains lately due to increasing demand in the power generation sector.

Furthermore, uranium prices gained more than 2% in the last week on the expectation of demand recovery due to an ease in COVID-19 curbs in China.

Must Watch: As Russia-Ukraine War Intensifies, Commodities Also Soars

Talking about precious metals, the prices of both gold and silver logged a second straight weekly gain. Comex gold futures gained 0.27% last week due to the continued softness of the US dollar. Additionally, the demand for precious metals has been rising as a safe-haven asset due to persistent geopolitical tensions and slower economic growth.

The prices of base metals including copper, aluminium, and iron ore prices tumbled significantly in the last week as COVID-19 restrictions in China and aggressive tightening policy from central banks sparked concerns related to weaker economic growth.

On the flip side, industrial metal zinc gained substantially in the last week. Furthermore, the prices of battery metals lithium and nickel also gained marginally last week.

Against this backdrop, let's skim through a few commodities that were popular among traders in the past week.

Data Source: Eikon Refinitiv

Here are a few significant commodities that recorded substantial volatility during the last week.

Natural Gas

Last week saw US natural gas futures rise more than 8% due to lower inventories. The US Energy Information Administration data states that the current inventory levels are 15.3% below the 5-year average. The value of the contract has more than doubled since the start of 2022, supported by higher cooling demand in the US and robust international demand.

Crude oil

Rising oil prices

Image source: © 2022 Kalkine Media®

Crude oil prices gained more than 4.08% in the last week, recording the second straight weekly gain. The prices reached their highest level in the last three months on the prospects of higher demand in China after an ease in COVID-19 related curbs. The prices were also buoyed by rising concerns over future supply amid the European Union's plan to ban Russian oil imports.


The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.

Top ASX Listed Companies

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK