Cocoa leads global commodity rally for 2nd year, metals struggle on demand from China By Reuters

By Naveen Thukral and Florence Tan

SINGAPORE (Reuters) – Cocoa and coffee are set to close 2024 as the top performers among commodities for a second year due to global shortages, while steelmaking coal will end up as the worst performer, hit by slow growth in China.

Looking ahead, global trade tensions are likely to dominate the stock market in 2025 as Donald Trump returns to the White House threatening higher tariffs, analysts say.

A strong dollar and gold’s appeal as a safe haven for investors are likely to support prices for the precious metal, while ample supply could pressure oil for a third year, they added.

In bad news for chocolate lovers, cocoa will nearly triple in price by 2024, gains far outstripping other commodities. It hit a record high of $12,931 a metric ton in New York earlier this month on forecasts of low availability for the fourth consecutive season in West Africa following dry weather.

“The softs sector, led by cocoa and coffee, is the one that took the lead in the midst of bad weather in important growing areas, which highlights the price risk when products like these are produced and available in small areas,” said Ole Hansen, head of the Department. assets strategy at Saxo Bank in Copenhagen.

Leading cocoa producers Ivory Coast and Ghana have lost crops due to bad weather, bean disease, smuggling and reduced plantations in favor of illegal gold mining.

The dryer has a filter coffee material as well. ICE Arabica coffee prices have soared to a more than 40-year high amid fears that a severe drought earlier this year has damaged future harvests for Brazil’s top producer.

CHINA’S GROWTH IS WORRIED TO GET OIL, IRON ORE

and many metals face headwinds in 2024 as China, the world’s second-largest economy and top consumer of commodities, struggles mainly due to the infrastructure crisis.

and West Texas Intermediate crude could post a third straight annual decline in 2025 as supply outpaces renewed demand growth, analysts said, although Trump’s policies on major producers Russia and Iran could curb supply.

Spare capacity in the Organization of the Petroleum Exporting Countries (OPEC) reached an unprecedented 5 million barrels per day (bpd), analysts estimated, as the group extended production cuts in March.

“The bleak inventory pattern next year suggests that OPEC+ will be challenged to restore barrels to the market,” Harry Tchilinguirian, head of research at Onyx Capital Group, said in a paper.

Iron ore prices in China have recouped some losses in recent months but are still on track for a 15% drop in 2024. Prices may fall again next year as steel supply increases and demand for Chinese steel falls, analysts say, despite Beijing’s stimulus measures.

“We expect the increase in iron ore from major miners to be higher than in 2024, but iron ore production in China is likely to decrease,” said Pei Hao, senior analyst at brokerage Freight Investor Services, forecasting a price range of $100. in 2025, down from an average of $110 in 2024.

Gold and silver are up more than 25% in 2024 and could rise further next year depending on the US Federal Reserve’s interest rate cuts and Trump’s tax, tariff and foreign policies, analysts said.

“Gold is the highlight for us in 2025,” said ING head of commodity research Warren Patterson, adding that purchases of hard gold by major banks would support demand.

and aluminum prices are set to finish 2024 higher, driven by tight supplies, energy transitions and hopes that China’s stimulus measures will boost demand.

POWER OILS, OILS AND DETERGENTS

In agricultural products, Malaysia’s palm oil futures jumped almost 20% in 2024, achieving losses for two consecutive years, prompted by Indonesia’s biodiesel mandate and bad weather in Indonesia and Malaysia.

Crop-threatening weather also led to a 42% gain in Tokyo rubber futures.

In contrast, soybeans, corn and wheat were in abundance, all on track for losses in 2024. However, wheat prices could find some support in 2025 as warm weather in Russia, the largest exporter, threatens to reduce output.

Brazil’s top soybean producer is poised to deliver record shipments by 2025, putting it in position to meet rising Chinese demand if the Washington-Beijing trade war breaks out.