HWWI raw material price index decreases for the first time this year
- HWWI total index falls by 2.7% (US dollar basis).Crude oil price fell by 2.7 %.
- Index for non-ferrous metals dropped by 5.4%.
Hamburg, 12 June 2019: The HWWI commodity price index decreased in May by 2.7 % (in euros: -2.3 %) compared with the previous month and thus to 120.5 points (in euros: 119.5 points). The prices of all commodity groups represented in the index fell, with the largest fall being recorded for energy raw materials. The index for energy raw materials fell by 2.8% (in euros: -2.4%), the index for industrial raw materials fell by 2.0% (in euros: -1.6%) and the index for food and beverages fell by 1.5% (in euros: -1.0%). Thus, the index excluding energy fell. In May, the index fell by 1.8 % (in euros: -1.4 %) compared with the previous month and was quoted at 108.7 points (in euros: 107.9 points). Prices on the commodity markets were determined in May in the context of escalating economic and geopolitical conflicts. The trade conflict between China and the USA escalated further. The USA announced that it would impose punitive tariffs on Mexico if Mexico did not succeed in reducing the migration of people to the USA. Furthermore, the conflict between the USA and Iran intensified. Iran is subject to strict sanctions imposed by the USA, which are intended, among other things, to prevent the export of Iranian crude oil.
Index for energy raw materials: -2.8 % (in euros: -2.4 %)
Crude oil prices fell by an average of -2.7% (in euros: -2.2%) to an average of 66.94 US dollars (59.84 euros) per barrel. The prices of all three types of crude oil represented in the index fell, with US crude oil from West Texas Intermediate (WTI) falling most sharply. The price of WTI fell by 4.6% (in euros: -4.2%). The price of Dubai crude oil from the Middle East fell by 1.9% (in euro: -1.4%) and the price of Brent crude oil from Europe fell by -1.7% (in euro: -1.3%). Well-filled crude oil inventories in the USA and the expectation that OPEC+ could decide on production increases at the Vienna conference at the end of June caused crude oil prices to fall in May.
The average price of natural gas fell by 4.7 % (in euro: -4.3 %), with European natural gas in particular falling in price. The monthly average price of European natural gas fell by 10.6% (in euros: -10.2%). Rising demand for eco-electricity and the end of the heating season weighed on demand in Europe. A relatively high supply combined with low demand caused an oversupply of natural gas in Europe. The USA is also increasingly planning to export US natural gas to Europe. US natural gas was only 0.6 % cheaper (in euros: -0.1 %). While the prices for crude oil and natural gas fell, the average coal price rose by 1.2 % (in euros: +1.7 %). Overall, the index for energy raw materials fell by 2.8 % in May (-2.4 % in euros) to 122.4 points (121.3 points in euros).
Index for industrial raw materials: -2.0 % (in euros: -1.6 %)
The prices of industrial raw materials included in the index of raw materials declined in May. The index for agricultural raw materials fell by 2.2% (in euros: -1.8%). The price of hides and skins fell by 14.0% (in euro: -13.6%). Concerns about using hides in apparel production and falling Chinese demand due to rising import tariffs have a dampening effect on demand. The price of cotton has continued to fall sharply. Cotton prices fell by 10.7 % (in euros: -10.3 %). The growing trade conflict between China and the USA is depressing demand. The index for non-ferrous metals fell by 5.4 % (in euros: -4.9 %). On a monthly average, the prices of all the non-ferrous metals represented in the index fell, with lead falling most sharply. The price of lead fell by 6.7% (-6.3% in euro terms). The price of copper and zinc fell by 6.6% (in euros: -6.1%). Nickel fell by -6.3% (in euros: -5.9%) and tin by -5.5% (in euros: -5.1%). The weakest fall was in the price of aluminum. Aluminum fell by 4.0% (in euros: -3. 5%). Iron ore and steel scrap are essential raw materials in steel production. The index for iron ore and steel scrap rose slightly by 2.3% (in euros: +2.8%), with steel scrap significantly cheaper in Europe and the USA, but the price of iron ore rose due to the relatively low supply. The US imposed a fine on the import of steel products, which has a negative impact on steel demand and thus on the demand for steel scrap. Overall, the index for industrial raw materials fell by 2.0% in May (-1.6% in euros) to 124.8 points (in euros: 123.9 points).
Index for food and beverages: -1.5 % (in euros: -1.0 %)
In May, the price trend for commodities included in the index for food and beverages was largely negative compared with the previous month. In particular, soybean and soybean oil prices fell. Soybean prices fell by 6.2 % (in euros: -5.8 %) and soybean oil fell by 5.2 % (in euros: -4.8 %). The trade dispute between the USA and China as well as the African swine flu in China are depressing demand. The price of palm oil also fell by 5.9% (in euros: -5.5%). The confrontation between the European Union (EU) and the palm oil producing countries, Malaysia and Indonesia, continues. The EU plans to significantly reduce the use of palm oil in biofuels within the next few years. Furthermore, the low price of soybean oil makes it possible to substitute palm oil. At present, Malaysia in particular is defending itself against EU allegations that palm oil cultivation has negative consequences in terms of climate, ecology and species protection. The price of sugar also fell due to high inventories in Mexico and India, good harvests and declining demand. Sugar prices fell by 5.9 % (in euros: -5.4 %). The coffee price fell by 1.4 % (in euros: -1.0 %). Cocoa prices fell slightly. The cocoa price fell by 0.7 % (in euros: -0.2 %). By contrast, corn, sunflower oil and tea became more expensive. The price of corn rose by 6.0% (in euros: +6.5%). Tea prices rose by 5.1 % (in euros: +5.6 %). Lack of rainfall in East Africa reduced the expected harvest results and as a result the price of tea rose in May. Overall, the index for food and beverages fell by 1.5 % in May (-1.0 % in euros) to 85.6 points (in euros: 84.9 points).