AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Highlights:
- Various commodities ranging across the categories of agriculture, energy, livestock, and metals have logged staggering gains in 2022 so far.
- Prices of both crude oil benchmarks have gained more than 36.21 percent in 2022 so far.
- Natural gas prices surged by a whopping 95.81% in 2022 due to curtailed supplies from Russia.
In the recent months, commodity prices have been on a wild run. Various commodities ranging across agriculture, energy, livestock, and metals have logged staggering gains during the present year with prices hitting multi-year highs.
The prices of commodities like crude oil, wheat, aluminium, copper, gold, coal, and many more have surged this year as the global economy eased COVID-19 restrictions during the beginning of 2022. Furthermore, the prices went into a furious rally as Russia's invasion of Ukraine disrupted the supply chains of key commodities due to the war and the subsequent imposed strict sanctions on Russia.
The volatility has not only heated the global commodity markets; it has also fuelled inflation in the US to a level not seen in the last 40-years. In this backdrop, let's have a look at a few significant commodities and how they performed in 2022.
Source: Refinitiv Eikon
Crude Oil
Prices of both crude oil benchmarks (Brent & WTI) have gained more than 36.21 percent in 2022. Curtailed supplies from the OPEC+ coupled with the global economy’s continued recovery from the pandemic helped the world to maintain the supply and demand dynamics, bringing oil prices to pre-pandemic levels during the start of the year.
Later, when the US embargoed Russian oil, oil bulls charged ahead in a breathless rally, catapulting the prices of Brent crude to US$139.13/bbl in the first half of March, the level last seen in 2008.
Natural Gas
Natural gas prices are currently trading near US$7.48/MMBtu, significantly lower than the thirteen-year high of $8.065 reached at the start of the week. In 2022, the prices of natural gas surged by a whopping 95.81%.
Curtailed supplies from Russia to Europe (one of the biggest consumers of natural gas in the world) coupled with robust demand for natural gas are widening the gap between demand and supply, driving the prices higher.
Good Read: Here’s why precious metals are shining amid gloom of war
Iron Ore
The prices of iron ore, one of the most important ingredients used to manufacture steel, has surged 19.67% so far in the current year. Iron ore prices started trending higher at the start of 2022 with an ease in global lockdowns. Earlier, China was not operating at its full capacity as the nation wanted to limit its greenhouse gas emissions because of the Olympic games, scheduled in February.
With an ease in environmental restrictions by government authorities and steelmaking industries ramping up their production in full swing, the demand for iron ore increased abruptly and prices jumped to multi-year highs in February.
Furthermore, the chaos between Russia and Ukraine additionally increased the pressure on the supply side, resulting in prices increasing in March.
Must Watch: What does 2022 have in store for the commodity market?
Bottom Line
The prices of various commodities gained significantly in 2022 due to a solid demand for raw materials as the world continued to make a swift recovery from the pandemic. The prices have further been on a breathless rally as the Russia-Ukraine war has ignited supply shortage concerns.
