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UnitedNations

GeneralAssemblyDistr.:General25July2023

Original:English

Seventy-eighthsession

Item17(d)oftheprovisionalagenda*

Macroeconomicpolicyquestions:commodities

WorldcommoditytrendsandprospectsReportoftheSecretary-General

Summary

Thepresentreport,preparedbythesecretariatoftheUnitedNationsConferenceonTradeandDevelopmentpursuanttoGeneralAssemblyresolution

76/194,

highlightsrecentdevelopmentsandprospectsinkeycommoditymarkets.Itprovidesananalysisoffactorsthatcontributedtothetrendsincommoditypricesin2022andthefirstquarterof2023.Thedatashowthatmostcommoditypricesincreasedinthefirstquarterof2022,drivenmainlybytheonsetofthewarinUkraine,leadingtouncertaintyandsupply-relateddisruptionsacrossvariousfoodandfuelcommodities.Thisaffectedthepricesofminerals,oresandnon-preciousmetals,whichincreasedowingtohighinputcosts.Thepricesofpreciousmetalsalsoroseowingtotheuncertaintybroughtaboutbythewar.Thisupwardtrendwasfollowedbydecliningpricesacrossnon-fuelcommoditiesthroughtherestoftheyearintoMarch2023(themostrecentmonthforwhichdataareavailable),owingmainlytoacontractionindemandtriggeredbyfearsofaglobaleconomicrecessionandaffordabilityconcerns.WeakChinesedemandduetoprolongedlockdownsandaggressivemonetarytighteninginvariouscountriestocombatinflationalsocontributedtothatdrop.Energypricesremainedelevatedwellinto2022owingtohighnaturalgaspricesasaresultofgeopoliticaltensionsaffectingsupplyintheEuropeanUnion.Fuelpricesdeclinedonlyinthelastfourmonthsof2022owingtolowerdemandafterrebuildinggasinventories.Ongoinggeopoliticalandeconomicuncertaintywilllikelykeeppriceshighlyvolatilein2023.Thereportpresentsanexplorationofsomepolicyissuesrelatedtorecentdevelopmentsandoffersrecommendationstohelpcommodity-dependentdevelopingcountriestoachievesustainabledevelopmentandinclusivegrowth.

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I.Introduction

1.ThepresentreportonworldcommoditytrendsandprospectswaspreparedbythesecretariatoftheUnitedNationsConferenceonTradeandDevelopment(UNCTAD)pursuanttoGeneralAssemblyresolution

76/194.

Thereportprovidesananalysisofrecentdevelopmentsincommoditymarkets,focusingonpricetrendsandtheirdeterminants.Thethreemajorcommoditygroupscoveredinthereportare:(a)agriculturalcommodities,includingfood,tropicalbeverages,vegetableoilseedsandoils,andagriculturalrawmaterials;(b)minerals,oresandmetals;and(c)energy,includingoil,gas,coalandrenewableenergy.

2.Thisreportalsooffersanexplorationofimportdiversificationasawayofmitigatingthenefariouseffectsofcommoditypricevolatilityonfoodinsecurity.

II.Recentdevelopmentsincommoditymarkets

A.Generaloverview

3.TheUNCTADfreemarketcommoditypriceindex1forallcommoditygroupsfollowedtheupwardtrendthatstartedinmid-2020owingtothecoronavirusdisease(COVID-19)pandemicandreachedahighof235.6pointsinAugust2022,owingprimarilytothesupplydisruptionsandpricehikesacrosscommoditiesthatresultedfromthewarinUkraine.InSeptember2022,theindexforallgroupsreverseditsupwardtrendanddeclinedto158.5pointsbyMarch2023.Thisdeclineresultedfromreduceddemandtriggeredbyconcernsaboutaglobaleconomicrecessionandaggressivemonetarytighteninginvariouscountriestocombatinflation.

FigureI

UNCTADfreemarketcommoditypriceindex,allgroups

(2015=100)

Source:UNCTADsecretariatcalculationsbasedondatafromUNCTADstat.

1TheUnitedNationsConferenceonTradeandDevelopment(UNCTAD)freemarketcommodityindexwasrebasedto2015=100,withnewcommoditiesaddedtotheoldindex,hencetheuseofnewweights.Thenewindexincludesseparateindicesforthegroupoffuelsandasubgroupof

preciousmetals.AllwebsitesreferredtointhepresentreportwereaccessedinMay2023.

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4.ThemonthlyfluctuationsoftheUNCTADcommoditypriceindexillustratethedegreesofvariationincommodityprices(seefigureII).In2022,theindexwitnessedwidemonthlyvariationsowingtonumerousfactors(seesect.II.B).Theindex’shighestandlowestpercentagechangesoccurredinMarch(18.9percent)andOctober(-9.5percent).

FigureII

MonthlyfluctuationsoftheUNCTADfreemarketcommoditypriceindex,allgroups

(Percentagechange)

Source:UNCTADsecretariatcalculationsbasedondatafromUNCTADstat.

B.Developmentsinkeycommoditysectors

1.Foodandagriculturalcommodities

5.TheUNCTADfoodpriceindexpeakedinMay2022,reaching159.2points,butdroppedto135.6pointsinMarch2023(seefigureIII).Thispatternfollowsthefluctuationsintheindexoffoodandvegetableoilseedsandotheroilsclosely,whichexperiencedthelargestvariationamongallfoodgroups.SomefactorsbehindthesefluctuationsarethewarinUkraineandthesubsequentInitiativeontheSafeTransportationofGrainandFoodstuffsfromUkrainianPorts(BlackSeaInitiative)andmemorandumofunderstandingonfacilitatingexportsofRussianfoodproductsandfertilizers,whichenabledthecontinuedexportsofagriculturalproductsfrombothUkraineandtheRussianFederation,aswellasweatherconditionsandsoaringfertilizercosts.2

2UNCTAD,“ATradeHope:TheImpactoftheBlackSeaGrainInitiative”,March2023(Geneva,UNCTAD,2023).

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FigureIII

Priceindicesofselectedcommoditygroups

(2015=100)

Source:UNCTADsecretariatcalculationsbasedondatafromUNCTADstat.

Note:AllfoodcorrespondstothecompositeUNCTADfoodindexcoveringthefood,tropicalbeveragesandvegetableoilseedsandoilssubindices.

6.Maizepricesincreasedto$364permetrictoninMarch2022(seefigureIV),underpinnedbydisruptionsinproductioninUkraine,amajorexporterofmaize,andhighfertilizercosts.Maizepricesdeclinedthroughoutthesecondquarterof2022,owingtoincreasedproductionfromArgentinaandBrazilandweakerdemandforanimalfeedfromandtheUnitedStatesofAmericaandtheEuropeanUnion.3,4TheBlackSeaInitiativesignedinlateJuly2022alsoeasedmarketpressures.5Despitethisdecline,maizepricespeakedagaininOctoberbeforefallingasecondtime,recording$290.3permetrictoninMarch2023.UncertaintysurroundingtherenewaloftheBlackSeaInitiative6andunfavourableweatherconditionsinArgentina,theUnitedStatesandtheEuropeanUnioncontributedtothepricejumpinOctober.7Meanwhile,Brazil’sincreasedproductionandweakdemandintheUnitedStatesexerteddownwardpressureonpricesbytheendof2022andearlyin2023.8WeakdemandandanticipatedincreasesinmaizeproductionintheUnitedStatesmaycontributetolowerpricesin2023.However,upwardrisksremainfromcontinueduncertaintyregardingthefutureoftheBlackSeaInitiative9andshortsuppliesinArgentina.10

3See

/business/un-food-price-index-falls-again-july-2022-08-05/.

4WorldBank,“Pandemic,war,recession:driversofaluminumandcopperprices”,CommodityMarketsOutlook(WashingtonD.C.,WorldBank,2022).

5UNCTAD,“Atradehope:theimpactoftheBlackSeaGrainInitiative”.

6See

/news/black-sea-grain-initiative-offers-hope-shows-power-trade.

7See

/newsroom/detail/benchmark-for-world-food-prices-was-broadly-steady-in-

october/en.

8TatianaFreitasandTarsoVelosoRibeiro,“RecordcorncropinBrazilvitaltokeepingfood

pricesincheck”,Bloomberg,19December2022.

9See

/news/black-sea-grain-initiative-offers-hope-shows-power-trade.

10EconomistIntelligenceUnit,“Maize:April”,April2023.

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FigureIV

Pricetrendsofselectedfoodandagriculturalcommodities

Source:UNCTADsecretariatcalculationsbasedondatafromUNCTADstat.

Note:Thepricemovementsofsugarandbeefarereflectedintherightaxis.Maize,wheat,riceandsoybeanmealpricesarereflectedintheleftaxis.

7.TheinternationalbenchmarkpriceofUnitedStateswheatalsoexperiencedlargefluctuationsin2022(seefigureIV)associatedwithsupplydisruptionsfromtheBlackSea.First,wheatpricesincreasedfrom$373permetrictoninJanuaryto$523permetrictoninMay2022,owingtothewarandreducedexportsfromUkraine.11FollowingtheBlackSeaInitiativeandhigher-than-expectedoutputfromAustralia,CanadaandtheRussianFederation,wheatpricesdeclinedto$382permetrictoninAugust2022.12,13Notwithstandingasubsequentpricerise,higherproductionandlowdemandfromtheUnitedStatesthenweigheddownonpricesasecondtime,14reaching$373permetrictoninMarch2023.FuturepricemovementswillbeshapedbythedevelopmentsintheBlackSearegionandthefutureoftheBlackSeaInitiative.15,16Wheatpricesareforecasttocontinuetodecline,assumingexportsfromtheBlackSeacontinuetoflow.17

8.ThebenchmarkpriceofThailandriceincreasedfrom$427permetrictoninJanuary2022to$464permetrictoninMay2022.NotwithstandingadeclinebetweenJuneandNovember2022,pricesroseagaininDecember,reaching$476permetrictoninMarch2023(seefigureIV).Fluctuationswereattributedtoweathervariabilityaffectingsupplythroughouttheyear.IncreasingpricesinNovemberreflectedtightsuppliesowingtodryconditionsinChinaandlowerplantedareasinIndia,whichoffsetincreasedproductioninThailandandVietNam.18Thiscoincidedwithcurrency

11WorldBank,“TheimpactofthewarinUkraineoncommoditymarkets”,CommodityMarkets

Outlook(WashingtonD.C.,WorldBank,2022).

12See

/en/story/2022/08/1124012.

13EconomistIntelligenceUnit,“Wheat:April”,April2023.

14FoodandAgricultureOrganizationoftheUnitedNations(FAO),“Monthlyreportonfoodprice

trends”,FoodPriceMonitoringandAnalysisBulletin#10,14December2022(Rome,FAO,2022).

15EconomistIntelligenceUnit,“Wheat:April”,April2023.

16See

/news/continuation-black-sea-initiative.

17EconomistIntelligenceUnit,“Wheat:June”,June2023.

18WorldBank,“Pandemic,war,recession:driversofaluminumandcopperprices”.

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appreciationagainsttheUnitedStatesdollarinAsianexportingcountries,reflectinghigherprices.19Riceconsumptionisforecasttoincrease,drivenbygrowingdemandinBangladesh,ChinaandThailand20thatwilllikelyexceedproductionandexertinflationarypressureonprices.

9.ThemonthlyaverageoftheInternationalSugarAgreementdailypricesroseto19.6centsperpoundinApril2022(seefigureIV),owingtohigherinputcostsfollowingthewarinUkraine.21AfterpeakinginApril,sugarpricesdeclined,averaging17.5centsperpoundinOctober2022owingtoadepreciationoftheBrazilianrealandlowerethanolpricesleadingtoincreasedproductioninBrazil.ImprovedproductionprospectsinIndiafurthercontributedtolowersugarprices.22Sugarpricesthenroseto18.9centsperpoundinDecember2022,owingtounfavourableweatherinIndiaanddelaysinsugarcanecrushinginAustraliaandThailand.23Sugarpriceshavecontinuedtorisein2023,higherproductionprospectsnotwithstanding,owingtosupply-relatedconstraintsandcountriesstockpilingduetouncertaintyandfearofshortages.24

10.Soybeanpricesincreasedfrom$526permetrictoninJanuary2022to$601permetrictoninMarch2022(seefigureIV),owingtoincreaseddemandforsunflowerseedsubstitutes,highcrudeoilpricesandunfavourableweatherinSouthAmerica.25Pricesdeclinedto$519permetrictoninNovember2022,owingtoconcernsaboutaneconomicslowdownandbearishdemandfromChina.PricesroseagaininDecember,owingtounfavourableweatheraffectingproductioninArgentinaamidstrongdemandcontinuingintoMarch2023.26However,soybeanpricesareforecasttodeclinein2023owingtorecord-highproductionprojectedinBrazilandtheUnitedStates.Thatisexpectedtooutweighareboundindemandforbiofuels27andtheupwardrisksassociatedwithunfavourableweatherinArgentina.28

11.ThepriceofAustralianandNewZealandbeefdeclinedfrom$5.97perkilograminJanuary2022to$5.58perkilograminMarch2023(seefigureIV),owingtolowerdemandforpremiumbeefcutsandincreasedstaffingatmeatpackingplantsintheUnitedStates.29PressurestosellcattleamiddryweatherinAustraliaalsocontributedtolowerprices.30Beefpricesareforecasttoincreasein2023asdroughtshrinkscattleherdsintheUnitedStates.31

12.TheUNCTADvegetableoilseedsindexincreasedfrom171pointsinJanuary2022to211inMarch2022(seefigureV),owingtoanincreaseinsunflowerandsoybeanoilduetothewarinUkraineandtheclosesubstitutabilityofedibleoilsandoilseeds.Theindexdecreasedto153pointsinMarch2023owingtodeclinesinsunflower,soybeanandpalmoilprices.

19See

/en/story/2023/02/1133152.

20UnitedStatesDepartmentofAgricultureEconomicResearchService,“Riceoutlook:February”,10February2023(WashingtonD.C.,2023).

21SamuelGebre,“Braceforevenhighersugarprices,Europe’stopproducerwarns”,Bloomberg,16June2022.

22See

/newsroom/detail/global-food-commodity-prices-decline-in-july/en.

23See

/newsroom/detail/world-food-prices-dip-in-december/en.

24EconomistIntelligenceUnit,“Sugar:January”,January2023.

25Ibid.,“Soybeans:November”,November2022.

26Ibid.

27WorldBank,“Lowerprices,littlerelief”,CommodityMarketsOutlook(WashingtonD.C.,WorldBank,2023).

28EconomistIntelligenceUnit,“Soybeans:May”,May2023.

29See

/food-drink/dining/beef-price-decline-premium-steak-1234741794/.

30See

.au/news/rural/2023-03-17/cattle-prices-record-big-drop-cheaper-steak-

unlikely-consumers/102088062.

31PatrickThomas,“Whyyoursteakisgettingpricier”,TheWallStreetJournal,1June2023.

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FigureV

Pricetrendsofselectedcommoditiesinthevegetableoilseedsandoilsmarket

Source:UNCTADsecretariatcalculationsbasedondatafromUNCTADstat.

13.Soybeanoilpricesroseto$1,963permetrictoninMay2022(seeFigureV),exceedingalreadyhighpricesexhibitedin2021.ThiswasattributedtoincreaseddemandforsunfloweroilsubstitutesfollowingsupplydisruptionsinUkraine.32Pricesthendecreasedto$1,113permetrictoninMarch2023,owingtofavourablegrowingconditionsinSouthAmerica33andtheresumptionofUkrainianexportsaftertheBlackSeaInitiative.Soybeanoilpricesarelikelytocontinuetodeclinein2023owingtorecordharvestsinBrazilandtheUnitedStates.Thesearepredictedtooffsetseveredrought-relatedlossesinArgentina.34’35However,sluggishdemandfromChinaandIndiawilllikelyeasepressureonsoybeanoilprices.36

14.Palmoilpricescontinuedtheirupwardtrend,risingto$1,777permetrictoninMarch2022(seefigureV).Similartosoybeanoil,thiswasattributedtoasurgeindemandtoreplacesunfloweroil.37AnexportbanimposedbyIndonesiaonpalmoilandlower-than-expectedoutputinEastAsiaworsenedtightsupplyandfurtherincreasedprices.38AfterpeakinginMarch2022,palmoilpricesdecreasedto$972permetrictoninMarch2023.Thisresultedfromnumerousfactors,includingtheBlackSeaInitiative,39Indonesialiftingitsexportbanandweakdemandowingtoconsumeraffordabilityconcernsandlimitedgrowthprospects.40Palmoilpricesare

32SeeWorldBank,“TheimpactofthewarinUkraineoncommoditymarkets”.

33Seeibid.,“Pandemic,war,recession:driversofaluminumandcopperprices”.

34See

/commodityinsights/en/market-insights/latest-news/agriculture/032323-

south-american-soybean-oil-prices-drop-to-more-than-two-year-low.

35EconomistIntelligenceUnit,“Soybeans:November”,November2022.

36See

/commodityinsights/en/market-insights/latest-news/agriculture/032323-

south-american-soybean-oil-prices-drop-to-more-than-two-year-low.

37See

/business/energy/palm-oil-becomes-costliest-vegoil-ukraine-war-halts-

sunoil-supply-2022-03-01/.

38SeeWorldBank,“TheimpactofthewarinUkraineoncommoditymarkets”.

39See

/news/continuation-black-sea-initiative.

40SeeWorldBank,“Pandemic,war,recession:driversofaluminumandcopperprices”.

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forecasttoriseinmid-2023,notwithstandinghighproductionduetoincreaseddemandinIndonesia,whereanewpolicyrequiresahigherblendofpalmoilinbiodiesel.41UpwardpressuresmayalsoarisefromthepossibilityofElNi?oleadingtodryweatherandreducedyieldstowardstheendoftheyear.42

15.Sunfloweroilpricesincreasedby67percentbetweenJanuaryandMarch2022,reaching$2,361permetrictoninMarch2022.ThispricesurgewasunderpinnedbysupplydisruptionsintheRussianFederationandUkraine,whichaccountformorethan75percentofglobalexports.43Pricesbegantodeclineowingtoweakdemandduetoaffordabilityconcernsandtheimprovedavailabilityofothervegetableoils.44ThelaunchoftheBlackSeaInitiativeinJuly2022,whichalsocoveredsunfloweroilandmeal,alsoeasedmarketpressures.45ByMarch2023,sunflowerpriceshadreached$1,075permetricton,representinga54percentdecreasebetweenMarch2022andMarch2023.Owingtointensecompetitionfromsubstitutes,sunfloweroilpriceswilllikelyfallfurther,notwithstandinguncertaintyaboutexportroutesintheBlackSearegionandlimitedproductioninUkraine.46

16.TheUNCTADtropicalbeveragesindexdeclinedfrom141pointsinJanuary2022to117inDecember2022(seefigureVI),duetodecreasedcoffeeprices.Thedeclinein2022notwithstanding,theUNCTADtropicalbeveragesindexremainsabovepre-COVID-19valuesandhassinceincreasedto124pointsinMarch2023.

FigureVI

Pricetrendsofselectedtropicalbeveragecommodities

Source:UNCTADsecretariatcalculationsbasedondatafromUNCTADstat.

41See

/world/asia-pacific/indonesias-biodiesel-policy-dry-weather-keep-palm-oil-

prices-elevated-2023-03-08/.

42SeeEconomistIntelligenceUnit,“PalmOil:May”,May2023.

43SeeAnuradhaRaghu,“Recordcookingoilsarelatestthreattosurgingfoodinflation”,

Bloomberg,3March2022.

44SeeEconomistIntelligenceUnit,“SunflowerseedOil:April”,April2022.

45SeeUNCTAD,“Atradehope:theimpactoftheBlackSeaGrainInitiative”.

46SeeEconomistIntelligenceUnit,“Sunflowerseedoil:May”,May2023.

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17.Cocoabeanpricesaveraged112centsperpoundinJanuary2022,remainingrelativelystablethroughout2022untilanincreaseto121centsperpoundinMarch2023(seefigureVI).Consumptionisforecasttorisefasterthanproductionowingtohigherinputpricesandadverseweatheraffectingsupply,inparticularinC?ted’Ivoire,theworld’slargestcocoaproducer.47Thatwilllikelycontinuetosupportpricesin2023,notwithstandingthepositivegrowthprospectsofhigh-qualitycocoainLatinAmerica.

18.Afterincreasingto$2.7perkilograminFebruary2022,teapricesdeclinedto$2.1perkilograminJune2022(seefigureVI).Thisdownwardtrendreversedandpricesreached$2.4perkilograminMarch2023,owingtolimitedsupplyinSriLankaduetoeconomicchallengesandadverseweatherinIndia,Kenya,MalawiandUganda.48Pricesareforecasttocontinuetodeclinein2023owingtoweakdemandinCentralAsia,akeyconsumingregion.49

19.TheInternationalCoffeeOrganization’saveragemonthlycompositeindicatorpricedeclinedby23percent,from204centsperpoundinJanuary2022to157centsperpoundinDecember2022.ThatwassupportedbypositiveproductionprospectsforArabicaandRobustaandweakdemand.50Coffeepricesincreasedto172centsperpoundinFebruary2023andarelikelytorisefurther,owingtohighfertilizercostsandadverseweather.51

20.TheUNCTADagriculturalrawmaterialsindexfellfrom114pointsinJanuary2022to99inMarch2023(seefigureVII),52owingtodeclinesincottonandrubberprices.

FigureVII

Pricetrendsofselectedagriculturalrawmaterials

Source:UNCTADsecretariatcalculationsbasedondatafromUNCTADstatandtheWorldBank.

47Seeibid.,“Cocoa:May”,May2023.

48SeeWorldBank,“Pandemic,war,recession:driversofaluminumandcopperprices”.

49Seeibid.,“Lowerprices,littlerelief.”.

50SeeWorldBank,“Pandemic,war,recession:driversofaluminumandcopperprices”.

51SeeEconomistIntelligenceUnit,“Coffee:May”,May2023.

52PricedataoncottonfromtheWorldBank.See

/en/research/commodity-markets.

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21.ThecottonAindexprice,abenchmarkforworldcottonprices,peakedat$3.61inMay2022beforedecliningto$2.10perkilograminMarch2023(seefigureVII).Theinitialpriceincreasewasduetoadverseweatherincotton-producingareasintheUnitedStates,soaringenergypricesandfertilizershortagesfollowingthewarinUkraine.53ThedeclinebetweenMay2022andMarch2023wasattributedtolowdemandamidfearsofaneconomicslowdownoffsettingupwardpressuresfromthereducedoutputinIndiaandPakistan.54Cottonpricesareforecasttocontinuetotrenddownin2023duetobearishdemand.55

22.Afterreaching212centsperkilograminMarch2022,naturalrubberpricesdeclined,quoting154centsperkilograminDecember2022(seefigureVII).Thiswasdrivenbysubdueddemandfromslowingeconomicactivityanddisruptionsintheautomobileindustry.56FavourableweatherandincreasedoutputinC?ted’IvoireandThailandalsocontributedtolowerprices.57However,pricesroseto158centsperkilograminMarch2023.IncreaseddemandandimprovedbusinesssentimentinChinawilllikelycontinuetoexertupwardpressureonpricesin2023.58

2.Minerals,oresandmetals

23.TheUNCTADminerals,oresandnon-preciousmetalspriceindexrosefrom204pointsinJanuary2022to232pointsinApril,owingtopriceincreasesinallcommoditiesinthegroup,inparticularnickel,zincandironore(seefigureVIII).59InMay2022,thisupwardtrendreversed,andtheindexfellto190pointsinMarch2023.

FigureVIII

Pricetrendsofselectedmineralsoresandnon-preciousmetals

Source:UNCTADsecretariatcalculationsbasedondatafromUNCTADstatandtheWorldBank.

53SeeEconomistIntelligenceUnit,“Cotton:November”,November2022.

54SeeWorldBank,“Pandemic,war,recession:driversofaluminumandcopperprices”.

55SeeEconomistIntelligenceUnit,“Cotton:November”,November2022.

56Ibid.,“Naturalrubber:December”,December2022.

57SeeWorldBank,“Pandemic,war,recession:driversofaluminumandcopperprices”.

58See

/article/2092728/natural-rubber-makes-strong-start-to-

year-with-month-high-prices.

59Pricedataonaluminium,ironore,copperandnickelfromtheWorldBank.See

/en/research/commodity-markets.

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24.Ironorepricesincreasedfromanaverageof$133perdrymetrictoninJanuary2022to$152perdrymetrictoninMarch2022(seefigureVIII),owingtoreducedoutputfromUkraineandsupplydifficultiesfromtheRussianFederation.LabourshortagesinAustraliaandadverseweatherinBrazilalsocontributedtohigherprices.60Ironorepricesthendeclinedfrom$151perdrymetrictoninApril2022to$93perdrymetrictoninNovember2022afterthedemandforsteelproductsplummeted,owingtoaslowdowninindustrialandconstructionactivities.61AsmallincreaseinDecembernotwithstanding,ironorepricespresentedanetdeclineof16percentbetweenJanuaryandDecember2022.Althoughironorepriceshadsinceralliedto$128perdrymetrictoninMarch2023owingtorecoveringdemand,priceswilllikelyfallinthesecondhalfof2023owingtosteadysupplygrowth.UncertaintyabouttheglobaleconomyandlacklustredemandinChina,owingtopoliciesintendedtolimitsteelproductiontocurbpollution,arealsolikelytolowerpricesinthesecondhalfof2023.62

25.AfterexhibitinganincreasebetweenJanuaryandMarch2022owingtothewarinUkraine,copperpricesdeclinedfrom$10,231permetrictoninMarch2022to$7,545permetrictoninJuly2022.Thereafter,pricesremainedrelativelystableuntilincreasingto$8,856permetrictoninMarch2023(seefigureVIII).Asacommoditywithahighlyvolatileprice,copperhasapricepatternthatmirrorseconomicactivityandgeopoliticaldevelopments.63Pricesareforecasttorisefurtherowingtoareboundindemand.Indeed,concernsabouteconomicactivitynotwithstanding,apriceincreaseislikelytobesupportedbytheenergytransitionandenvironmentalpolicies,promptingdemandforelectricvehicles,chargingstations,thegenerationofrenewablesandgridstorage.64

26.Aluminiumpricescontinuedtheirupwardtrendfrom$3,006permetrictoninJanuary2022to$3,498permetrictoninMarch2022(seefigureVIII),owingtosoaringenergyprices,depletedglobalinventoriesandsupplydisruptionsofalumina,akeyinputofaluminium.65AfterpeakinginMarch2022,aluminiumpricesdeclined,quoting$2,296inMarch2023.ThisdropresultedfromaslowdowninmanufacturingactivityduetoincreasingfearsofaglobalrecessionandaweakconstructionsectorinChina.66PricesareforecasttoincreaseowingtosupplydisruptionsinAustraliaandBrazil.HighenergycostsassociatedwiththewarinUkrainewilllikelycontinuetoaffectEuropeansmelters,pushingupaluminiumprices.67Downwardrisksstemfromsluggishdemandowingtoconcernsabouttheglobaleconomy.

27.Zincpricesrosefromanaverageof184centsperpoundinJa