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Commodity Markets Outlook: Causes and Consequences. April 2021 Analysis A World Bank Report APRIL 2021 Commodity Markets OR ANY OTHER MEDIA USE UNTIL JANUARY 26, 2016, 10:00AM EST (1500 GMT) GMT) EMBARGOED: NOT FOR NEWSWIRE TRANSMISSION, POSTING ON WEBSITES, EMBARGOED: NOT FOR NEWSWIRE TRANSMISSION, POSTING ON WEBSITES, OR ANY OTHER MEDIA USE UNTIL JANUARY 26, 2016, 10:00AM EST (1500Outlook Causes and Consequences of Metal Price Shocks Apr Oct APRIL 2021 Commodity Markets Outlook © 2021 International Bank for Reconstruction and Development / World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved. This work is a product of the staff of the World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the World Bank, its Board of Executive Directors, or the governments they represent. 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The risk of claims resulting from such infringement rests solely with you. If you wish to re-use a component of the work, it is your responsibility to determine whether permission is needed for that re-use and to obtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, figures, or images. All queries on rights and licenses should be addressed to the Publishing and Knowledge Division, World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [email protected]. The cutoff date for the data used in this report was April 16, 2021. Table of Contents Acknowledgments ....................................................................................................................... v Executive Summary ..................................................................................................................... 1 Special Focus: Causes and consequences of metal price shocks .......................................................... 5 Commodity Market Developments and Outlook .......................................................................... 21 Energy ................................................................................................................................ 23 Agriculture .......................................................................................................................... 29 Fertilizers ............................................................................................................................ 34 Metals and Minerals ............................................................................................................. 35 Precious Metals ................................................................................................................... 37 Appendix A: Historical commodity prices and price forecasts.......................................................... 39 Appendix B: Supply-Demand balances......................................................................................... 47 Appendix C: Description of price and technical notes .................................................................... 79 Figures Figure 1 Commodity market developments .................................................................. 2 Figure SF.1 Oil and metals prices ................................................................................. 7 Figure SF.2 The importance of energy and metals .......................................................... 8 Figure SF.3 Market concentration of metal reserves, production, and consumption ......... 10 Figure SF.4 China’s impact on metal markets .............................................................. 11 Figure SF.5 Metal price shocks .................................................................................. 13 Figure SF.6 Metal price shocks to EMDE metal exporters and importers ........................ 14 Figure SF.7 Copper price shocks to EMDE copper exporters and importer ..................... 15 Figure 2 Oil market developments ............................................................................. 23 Figure 3 Oil supply developments .............................................................................. 24 Figure 4 Oil market outlook ...................................................................................... 25 Figure 5 Natural gas and coal .................................................................................... 27 Figure 6 Agricultural price developments .................................................................... 29 Figure 7 Supply conditions for grains and edible oils ................................................... 30 Figure 8 Risks to outlook .......................................................................................... 31 Figure 9 Beverage commodity market developments .................................................... 32 Figure 10 Agricultural raw materials market developments ............................................ 33 Figure 11 Fertilizer market developments.................................................................... 34 Figure 12 Metals and minerals market developments.................................................... 35 Figure 13 Precious metals market developments .......................................................... 37 iii Tables Table 1 Nominal price indexes and forecast revisions ............................................... 3 Annex Table SF Summary of empirical research on supercycles ............................... 17 Table A.1 Commodity prices .............................................................................. 41 Table A.2 Commodity prices forecasts in nominal U.S. dollars ............................... 43 Table A.3 Commodity prices forecasts in constant U.S. dollars (2010=100) ............. 44 Table A.4 Commodity price index forecasts (2010=100) ........................................ 46 iv Acknowledgments This World Bank Group Report is a product of the Prospects Group in the Equitable Growth, Finance, and Institutions (EFI) Vice Presidency. The report was managed by John Baffes under the general guidance of Ayhan Kose and Franziska Ohnsorge. Many people contributed to the report. Alain report provides detailed market analysis for major Kabundi, Peter Nagle, and Franziska Ohnsorge commodity groups, including energy, agriculture, authored the Special Focus on Causes and fertilizers, metals, and precious metals. Price Consequences of Metal Price Shocks. Section forecasts to 2035 for 46 commodities are presented, authors include Peter Nagle (energy), John Baffes together with historical price data. The report also (agriculture), and Wee Chian Koh (fertilizers, contains production, consumption, and trade statis- metals, and precious metals). Research assistance tics for major commodities. Commodity price data was provided by Arika Kayastha and Jinxin Wu. updates are published separately at the beginning of Maria Hazel Macadangdang produced the supply- each month. demand balance section. Design and production was handled by Adriana Maximiliano. Graeme Background analytical work presented in this report Littler produced the accompanying website. was generously funded by the Government of Japan through the Policy and Human Resources Betty Dow, Patrick Alexander Kirby, Graeme Development (PHRD) Fund, administered by the Littler, Shane Streifel, and Temel Taskin reviewed World Bank Group. the report. External affairs for the report were managed by Alejandra Viveros and supported by The report and data can be accessed at: Mark Felsenthal and Mikael Reventar. Staff of the www.worldbank.org/commodities Translation and Interpretation Services unit provided translations of dissemination materials. For inquiries and correspondence, email at: [email protected] The World Bank’s Commodity
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