Current situation of the commodities market

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The commodities market is currently experiencing high volatility, due to the Covid-19 pandemic that has disrupted the global supply and demand for raw materials. According to the index that measures the price evolution of major raw materials, the commodities market experienced a 20% decline in 2020, followed by self employeed database a 30% increase in 2021. In 2023, this market faces challenges and opportunities related to geopolitical, environmental and technological developments.

On the one hand, some commodities are in high demand, particularly those linked to the energy transition, such as lithium, cobalt or copper . These metals are essential for the manufacture of batteries, solar panels or wind turbines, which are sources of renewable and decarbonized energy. According to Janus Henderson Investors, lithium saw its price increase by more than 70% in 2022, after jumping by more than 400% in 2021. Demand for these commodities should remain supported by environmental policies and investments in green technologies, which aim to reduce greenhouse gas emissions and limit global warming.

On the other hand, some commodities are losing ground, particularly those linked to fossil fuels, such as oil, coal or natural gas . These hydrocarbons are responsible for a large part of greenhouse gas emissions and are therefore subject to increasingly strict regulations. In addition, demand for these commodities could fall due to the expected recession in the United States and Europe, as well as the slowdown in Chinese growth. According to Bloomberg Intelligence, commodity prices peaked in 2022 and are likely to fall significantly during 2023 as a result of central bank monetary tightening and demand destruction.