Global commodity prices soared in August, according to an estimate by FocusEconomics, a Spain-based leading provider of economic analysis and forecast.
In a September newsletter seen by businessamlive, FocusEconomics analysts said their global price index increased 5.6 percent in the review month from July’s result due largely to weather conditions, the largest monthly rise since November 2016.
Specifically, surging prices for base and precious metals drove the increase, while prices for energy commodities saw a more moderate rise. On the other hand, prices for agricultural commodities fell from the previous month.
On an annual basis, the recovery in prices, following the 2015–2016 price collapse, picked up notable momentum and global commodity prices were up 18.0 percent in August, significantly above July’s 10.9 percent gain.
Weather developments took center stage in recent weeks and were chiefly behind soaring energy prices, the FocusEconomics analysts said, noting that Hurricane Harvey hit Texas on 25 August with torrential rains and high winds, causing widespread flooding, power outages and major economic disruptions to the area’s energy production.
“Nearly one-third of U.S. oil refineries were estimated to have been impacted by the storm and vital infrastructure in the region was badly damaged. As a result, the hurricane aggravated commodities markets and pushed gasoline prices to a two-year high in the wake of the storm.”
In September, price pressures have receded somewhat as major refineries come back online and Hurricane Irma triggered shortages for key energy commodities.
Looking at the base metals market, a weak U.S. dollar led to widespread gains across most commodities. On top of this, a number of other factors are at play.
Copper prices rose to the highest level since November 2014, supported by positive economic data from China and a healthy outlook for sales of electric vehicles.
Equally, prices for iron ore and nickel both soared by double-digits in August on the back of shifting expectations over the health of China’s economy. In addition, zinc prices rose by over 7.0 percent in August as supply-side pressure caused by falling global stock