Commodity prices mixed last week as Chinese economy posted growth

By Tunahan Kukurt

ISTANBUL (AA) – Commodity prices were mixed last week, influenced by geopolitical uncertainties and political developments, as the Chinese economy posted growth.

China’s economy grew by 5% in 2024, surpassing expectations, with industrial production rising 6.2% annually and retail sales increasing 3.7% year-on-year.

In the US, the consumer price index (CPI) rose 2.9% year-on-year and 0.4% month-on-month in December 2024, aligning with forecasts. Meanwhile, the US Dollar Index dropped from 110.2, its highest level since November 2022, stabilizing at 109.7.

The IMF World Economic Outlook Report projected global growth of 3.3% for 2025 and 2026, below the historical (2000–2019) average of 3.7%.

A temporary ceasefire between Israel and Palestine eased market risk perceptions.

- Precious and base metals

Analysts noted that declining bond yields drove up precious metal prices. Gold increased 0.4%, and palladium rose 0.6% per ounce, while platinum and silver declined by 2.7% and 0.1%, respectively.

In base metals, China’s rising economic activity bolstered prices. Copper gained 1.5% last week, despite Chilean miner Antofagasta reporting only a 1% increase in 2024 production to 664,000 metric tons, falling short of expectations.

Nickel climbed 1.2% after Vale Indonesia announced plans to sign a $1 billion contract with Petrosea in March for nickel mining in Central Sulawesi. Aluminum surged 4.3%, while lead and zinc rose 1.1% and 2.9%, respectively, per pound.

- Energy markets

Brent crude oil prices rose 1%, driven by new US sanctions on Russian oil producers, though concerns about rising global supply capped gains.

The Organization of the Petroleum Exporting Countries (OPEC) maintained its 2025 global oil demand forecast, projecting a 1.4 million barrels-per-day increase to 105.2 million barrels. OPEC’s oil production rose by 26,000 barrels per day in December to 26.7 million barrels.

Natural gas prices dropped 1.8% amid geopolitical tensions between Russia and Ukraine. Russia reported strikes on Ukraine’s gas and energy infrastructure, while Poland announced plans to cut liquefied petroleum gas (LPG) imports from Russia by 80% in 2025 due to sanctions.

South Korean Trade Minister Ahn Duk-geun stated that the country may increase oil and gas imports from the US to diversify energy sources, following tariff threats from President-elect Donald Trump.

- Agriculture and soft commodities

Speculation of trade wars re-escalating under Trump’s second term has impacted trade flows. Chinese buyers increased stockpiles and turned to alternative suppliers, with soybean processors favoring Brazil over the US due to competitive pricing.

In the US, soybean and corn futures rose 1% and 2.9%, respectively, after the Department of Agriculture lowered its 2024 harvest forecast. Wheat climbed 1.6%, while rice gained 2.4%.

Sugar dropped 4.2% as France’s Ouvre announced the closure of its sole factory, citing poor harvests and diseases that have led farmers to abandon beet cultivation.

Cocoa prices surged 5.7% following allegations of smuggling in Ivory Coast, the world’s largest cocoa producer. Coffee rose 1.4%, while cotton fell 0.4%.

Writing by Emir Yildirim