HWWI Consult GmbH
(Hamburg, March 6, 2023) The HWWI Commodity Price Index fell again by double digits in February. It fell by 10.2%, after already falling by 19.7% in January, and was thus 20.7% below the value for February 2022.
As in January, falling prices for energy raw materials were the main reason for the drop in the overall Index. The Index for Energy Raw Materials fell by 12.3%. The Index for Industrial Raw Materials fell by only 0.3%, while Index for Food and Beverages rose slightly (+2.5%), as in the previous month.
The Sub-Index for Natural Gas fell by 19.7% in February and was thus 37.1% below the February 2022 value.
Savings by private households and industry, filled storage facilities and higher production, also of LNG, were the reasons for the further fall in prices. However, this should not yet be interpreted as a sign of lasting relief. If demand from China and other Asian countries increases again, prices are likely to rise again.
The Sub-Index for Coal fell more significantly in February than in the previous month by 35.6%. It was now also 10.2% lower than in the same month of the previous year. Contributing to the falling prices is the fact that there are currently no longer any concerns about security of supply in the Energy market and that winter in the northern hemisphere is approaching its end. The situation in China is also an important factor on the Coal market: In the course of a slow recovery of the Chinese economy, import demand is weak and at the same time China has increased its own Coal production to a new record. Both developments have a dampening effect on prices.
Overall, the Index for Energy Raw Materials fell by 12.3% (euro basis: -11.8%) in January to 230 points (euro basis: 245.8 points).
As in the previous month, there were no significant changes in the Index for Industrial Raw Materials in February. The comparatively relaxed situation stabilized further. The Sub-Index for Agricultural Raw Materials rose by 4.7% and was driven in particular by the price of Sawn Timber, which rose by 23.4% in February. After the price of Sawn Timber had fallen sharply in some cases in recent months, it now rose by double digits for the first time in a long while but is still 63.6% below the previous year’s level. Whether this is a permanent trend reversal remains to be seen. The price decline in recent months was mainly due to a low in the construction sector. The Sub-Index for Agricultural Raw Materials was 32.8% below the previous year’s level in the month under report.
The Sub-Index for Non-Ferrous Metals fell by 2.7% in February and was 18.5% lower than in February 2022.
The Sub-Index for Iron Ore and Steel Scrap rose slightly by 1.1 % and was 27.1 % below the previous year’s value.
The Index for Industrial Raw Materials fell by an average of 0.3% in February (euro basis + 0.3%) and was thus 24.1% lower than a year earlier. The Index reached a value of 126 points (euro basis 134.5 points).
The Index for Food and Beverages rose by 2.5% in February compared to the previous month and was 3.3% lower than in the same month of the previous year.
Individual prices in the sub-index developed quite differently. The most significant change was in the price of coffee, which, after declining for several months in a row, now rose by 11.4% compared to the previous month. The main reason for this is a poor harvest in Brazil, the main producing country, due to drought, frost and extreme rainfall. Increased labour and energy costs in the growing countries as well as higher freight costs have also caused the price of coffee to rise again. In the future, the price of coffee is expected to fluctuate more, as the coffee plant is very sensitive and extreme weather events will increase due to climate change.
Overall, the Index for Food and Beverages rose by an average of 2.5% for the month (euro basis: 3.0%) and stood at 158 points (euro basis: 168.5 points).
The HWWI Commodity Price Index is a comprehensive, weekly calculated indicator of price
developments in world commodity markets, which includes the major internationally traded commodities. Since 1960, the HWWI Commodity Price Index measures the price changes in the raw material import calculation of the industrialized countries and is thus an indicator for the cost development of imported raw materials and serves among other things central banks, research institutes and international institutions for their analyses.
English
English
