As the prices of most commodities declined, 2024 was largely favorable for buyers, with the exception of agricultural products. This report provides both an analysis of global commodity price trends (based on data from the World Bank and Intratec) and insights into projections for 2025.
Global Commodities
Based on data published by World Bank Commodity Price Data (The Pink Sheet), I observed Energy and Fertilizer declined in 2024 compared to 2023, along with small increase in Meat.
Agriculture: According to the Financial Times, agricultural commodities experienced notable price increases in 2024 due to persistent supply constraints. Climate change has played a significant role in reducing crop yields across multiple regions: Oranges (Brazil), Cocoa (West Africa), Olives (Southern Europe), and Coffee (Vietnam) all faced supply shortages, contributing to rising prices.
Energy: Energy prices saw an overall decline in 2024, following historically high prices in 2022 and early 2023. However, certain market dynamics led to fluctuations: Natural gas price increases due to reduced production in the U.S., the cessation of Russian gas flow through Ukraine, and colder-than-average winter temperatures that boosted demand. Coal prices trended downward as alternative energy sources gained traction.
Fertilizers: Prices for nitrogen and potassium fertilizers generally declined in 2024. Phosphorus-based fertilizers saw modest price increases due to supply constraints from China, the largest producer.
Metals: Except for copper, all base and battery metals experienced price declines in 2024, driven by oversupply and weaker-than-expected demand.
Meat: Beef prices surged due to supply constraints. Pork and poultry prices remained stable or saw slight declines due to higher global production and stronger supply.
Outlook for 2025
From different sources, we can estimate this outlook for 2025:
Agriculture: The World Bank forecasts a 4% decline in agricultural commodity prices in 2025 following their increase in 2024.
Crude Oil: Forecasted prices vary slightly across sources: EIA: $74/barrel, Morgan Stanley: $70/barrel, Goldman Sachs: $76/barrel. These projections suggest oil prices will remain stable or slightly lower than in 2024.
Natural Gas: EIA expects an increase to $3.00/MBTU in 2025 (versus $2.19 in 2024) due to sustained demand and rising export levels.
Metals: Copper and Nickel prices are expected to see slight increases due to high demand from energy transition (EV, Wind, Solar). Iron ore prices may decline in 2025 due to slower steel demand, especially from China.
Fertilizers: Potash prices may stabilize or decline. Phosphorus-based fertilizers are likely to remain elevated. Nitrogen fertilizers may rise due to higher natural gas costs.
Meat: Beef prices are expected to stay high due to reduced production. Pork and poultry markets may stabilize, with modest production increases and relatively steady prices.
Overall Price Trends
Chemicals & Polymers
For Chemicals and Polymers, I have used price data from Intratec, which publishes monthly Import/Export prices by country. Even though Import/Export prices tend to be lower than the market, they remain good reference points because they reflect monthly changes in the market.
This article reflects on price changes from 2023 to 2024 in the USA, Europe, and Asia in four areas:
- Organic Chemicals: 90 products (Acetone, Acrylonitrile, Benzene, Cumene, and others)
- Inorganic Chemicals: 59 products (Caustic Soda, Carbonates, Sulfates, Phosphates, and others)
- Polymers: 39 products (ABS, PET, PE, PP, and others)
- Metals: 28 products (Aluminum, Copper, Carbon and Stainless Steel, and others).
Price Movement
For the price evolution of raw materials, the graphs below show per-pound dollar values by region on the left axis. You will observe the comparison price overlay of Crude Oil (in black) with per-barrel dollar values on the right axis.
2024 Prices
Because the above line graphs present some difficulty in comparing prices, I include the following bar graphs in percentages to analyze the average prices of 2024 compared to 2023, using the same scale for comparison.
Price Trends (2024 vs. 2023)
Based on price data published by Intratec we noticed the following:
- Organic Chemicals: 64% of the 90 organic chemicals analyzed witnessed price declines, led by Hexamethylenediamine and Oxalic Acid, while Butadiene and Methanol recorded price increases.
- Inorganic Chemicals: 75% of 59 inorganic chemicals experienced price declines, notably Lithium derivatives, while Superphosphate and Sulfuric Acid saw price increases.
- Polymers: 66% of the 39 polymer products analyzed declined in price, particularly Paraformaldehyde and Phenol-Formaldehyde, whereas Epoxy and Cellulose Acetate saw price increases.
- Metals: 69% of 28 metals saw price declines, led by Cobalt and Nickel, whereas Aluminum and Copper prices increased. The broader dataset here is from Intratec, which provides deeper insight than the World Bank, which tracks only seven metals.
Outlook for 2025
- Inorganic Chemicals: Growth this year will be driven by demand from construction, electronics, and agriculture. Rising natural gas prices are expected to impact production costs.
- Organic Chemicals: Global production is projected to grow by 2.9%, fueled by strong demand for pharmaceuticals, agrochemicals, and personal care products. Natural gas price increases will impact derivatives.
- Polymers: Market volatility is expected, driven by supply-demand balances and energy costs. Global oversupply is likely to continue, exerting downward pressure on prices, although rising natural gas costs may influence derivative prices.
Conclusion
As we move into 2025, commodity markets are expected to experience mixed trends. While energy and metal prices may see moderate increases, agricultural commodities and fertilizers face a potential downturn. The chemical and polymer markets will likely be influenced by macroeconomic factors, including energy prices and supply-demand shifts. So, I suggest following closely the main drivers for the products you consume.