HWWI- Commodity price index in plus

Kloepfel Consulting GmbH / HWWI- Commodity price index in plus

HWWI- Commodity price index in plus

Prices for crude oil and natural gas rose in September

  • HWWI overall index increased by 5.6 % (US dollar basis).
  • Prices for crude oil rose by 6.1%.
  • Food and beverage prices fell by 2.8%.

(Hamburg, 09 October 2018) In September, the HWWI raw material price index rose to 140.4 points (in euros: 133.6 points). The index for energy resources rose by 6.5 % (in euros: +5.5 %), with crude oil rising by an average of 6.1 % (in euros: +5.1 %) per month after the price of crude oil fell in August. The industrial raw materials index fell again in September for the third month in a row by a total of 1.2% (in euros: -2.1%). This means that the price decline was less pronounced than in the two previous months. The index for food, drink and tobacco fell by 2.8 % (in euros: -3.7 %) and thus more sharply than in the previous month. Uncertain US policy continued to influence price formation on the commodity markets in September. The index excluding energy fell by 1.7% (in euros: -2.7%) to 106.9 points (in euros: 101.7 points).

Index for energy resources: 6.5 % (in euros: +5.5 %)

In September, the monthly average price of crude oil rose by 6.1% (in euros: 5.1%) to 75.86 US dollars (in euros: 65.06) per barrel. The US-American sanctions are burdening the supply of crude oil. Declining production volumes in Venezuela and Iran as well as low US stocks with sustained good demand are responsible for the rising prices on the crude oil market. Fears that OPEC, above all Saudi Arabia, together with Russia will not succeed in achieving the targeted production quota have increased. In detail, the monthly average prices of the three most important reference grades for crude oil rose as follows: US West Texas Intermediate (WTI) crude oil rose by 3.3 % (in euros: +2.4 %), European Brent crude oil rose by 7.1 % (in euros: +6.1 %) and Dubai crude oil from the Middle East rose by 7.9 % (in euros: +6.9 %). Dubai, the leading variety, thus recorded the largest average price increase compared with Brent and WTI in September.

In September, the monthly average price of natural gas rose by 11.1 % (in euros: +10.1 %) after having risen already in August. Uncertainty regarding the continuation of the Nord Stream 2 project is increasing due to the continuing US criticism of the European natural gas policy and the associated possible sanctions against Russia. These uncertainties are responsible for the significant increase in prices for natural gas in Europe. The rise in the price of CO2 certificates also had a price increasing effect on the European natural gas price, as the production and use of natural gas as an alternative to other fossil fuels is associated with relatively lower CO2 emissions. By contrast, American natural gas rose by only 1.0% (in euros: ± 0.0%) compared with the previous month. Coal prices fell by an average of 2.5 % (in euros: -3.4 %) and thus more sharply than in August. Overall, the index for energy raw materials fell by 6.5 % (in euros: 5.5 %) to 145.8 points (in euros: 138.7 points).

Index for industrial raw materials: -1.2 % (in euros: -2.1 %)

The index for agricultural raw materials fell by 2.1% (in euros: -3.0%). Sawn timber again became cheaper and fell by 5.7 % (in euros: -6.5 %). Germany, Austria, Russia and the Ukraine increased their export volumes. The high supply caused a decline in prices for sawn timber. The index of non-ferrous metals fell by 1.5 % (in euros: -2.4 %), continuing the negative trend of recent months. Price declines were again observed for all non-ferrous metals listed in the index. On a monthly average, nickel fell particularly sharply by 6.7% (in euros: -7.6%). The trade dispute between the US and China initially caused prices to fall significantly in the first half of the month. The renewed threat by the US to impose further punitive tariffs on Chinese exports intensified concerns about negative effects on Chinese demand. Nickel is needed, among other things, for the production of stainless steel and accumulators. Rising tariffs on these products would lead to falling demand. However, from mid-September nickel prices rose again as these concerns were shattered. On a monthly average, the zinc price fell by 3.1% (in euros: -4.0). The lead price fell by 1.8% (in euros: -2.7%). Aluminum prices fell by 1.1% (in euros: -2.1%). Copper recorded the lowest price discount. The copper price fell by 0.3 % (in euros: -1.2 %). With a slight increase of 0.2 % (in euros: -0.8 %), the index for iron ore and steel scrap continued its upward trend. Overall, the index for industrial raw materials fell by 1.2 % (in euro: -2.1 %) to 120.3 points (in euro: 114.5 points).

Index for food and beverages: -2.8 % (in euros: -3.7 %)

Food and stimulant prices fell again in September. The ongoing trade dispute between the US and China is leading to falling food prices. The imposed punitive tariffs are burdening US food imports to China as prices for imported food in China rise. Falling Chinese demand is causing food prices in international markets to fall as US producers are looking for new markets. The price of wheat fell by 6.8 % (in euros: -7.7 %) after having risen sharply in recent months. The harvest in the USA was higher than initially expected. Russia also exported large quantities of wheat in September. The coffee price fell by 4.1 % (in euros: -5.0 %), thus continuing the negative trend. Record harvests in Brazil and the weak Real keep the coffee price at a low level on a sustained basis. The average monthly cocoa price rose by 1.1 % (in euros: 0.1 %). Overall, the index for food and beverages fell by 2.8 % (in euros: -3.7 %) to 87.6 points (in euros: 83.3 points).


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