Global Commodity Markets Face Volatility Amid Economic Shifts and Policy Changes

Global Commodity Markets Face Volatility Amid Economic Shifts and Policy Changes

As of June 9, 2025, global commodity markets are experiencing significant volatility, influenced by a combination of economic slowdowns, policy changes, and shifting trade dynamics.

China’s Declining Commodity Imports Signal Economic Concerns

In May 2025, China reported a decline in imports of major commodities, including crude oil, coal, iron ore, and copper. This downturn suggests potential economic challenges in the world’s second-largest economy. Notably, crude oil imports fell to 10.97 million barrels per day, marking a decrease from previous months. Analysts attribute these reductions to sluggish domestic growth, particularly in the construction sector, and fluctuating global commodity prices. There is cautious optimism that forthcoming Chinese economic stimulus measures could rejuvenate demand for imported commodities. China’s imports of major commodities hiccup in May

Trafigura Warns of Continued Market Turbulence

Global commodities trader Trafigura has issued a warning about ongoing “turbulence” in commodity markets for the latter half of 2025. The company cites factors such as geopolitical uncertainty, high tariffs, inflationary pressures, and volatile U.S. policy changes as contributors to market instability. Despite these challenges, Trafigura reported steady net profits of $1.5 billion for the first half of the year, matching the previous year’s figures. However, profitability is trending lower compared to the peak during the 2022-2023 energy crisis. Trafigura warns of further ‘turbulence’ in commodities markets

World Bank Forecasts Decline in Commodity Prices

The World Bank’s latest Commodity Markets Outlook projects a significant decline in global commodity prices over the next two years, attributing this trend to weakening global growth and rising trade barriers. Prices are expected to drop 12% in 2025 and an additional 5% in 2026, returning to pre-COVID-19 levels observed from 2015 to 2019. While this decline may help moderate near-term inflation, it poses challenges for developing economies reliant on commodity exports. World Bank sees commodity prices falling to pre-COVID levels

Commodity Traders Expand Influence Amid Market Volatility

Leading commodity trading houses—Trafigura, Vitol, Gunvor, and Mercuria—have earned over $57 billion in net profits since the onset of the 2022 energy crisis. These firms are aggressively investing these gains to expand their influence across global supply chains. Investments include diversifying into assets such as power plants, petrol stations, and biofuels, while also strengthening core oil and metals trading operations. These expansions aim to boost profitability through enhanced control over physical assets and information advantages, despite rising competition from hedge funds and other market entrants. Commodity traders snap up assets and tighten grip on global supply chains

Gold Prices Reach Record Highs Amid Market Uncertainty

Gold prices have surged to record highs, driven by safe-haven appeal amid lingering concerns about tariff threats and uncertainty regarding the global economic outlook. On March 14, 2025, spot gold rose to $3,004.86 per ounce, marking a 14% gain since the start of the year. This rally reflects investors’ search for stability in a volatile market environment. Gold pops above $3,000 per oz for first time in historic safe-haven rally

Conclusion

The current landscape of global commodity markets is marked by significant volatility, influenced by economic slowdowns, policy changes, and shifting trade dynamics. Stakeholders must navigate these challenges carefully, staying informed and adaptable to mitigate risks and capitalize on emerging opportunities.