Global Commodity Markets Face Volatility Amid Economic Shifts and Policy Uncertainties
Mon, June 09, 2025Global Commodity Markets Face Volatility Amid Economic Shifts and Policy Uncertainties
As of June 9, 2025, global commodity markets are experiencing significant volatility, influenced by a combination of economic slowdowns, policy uncertainties, 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 reflects potential economic challenges in the world’s second-largest economy. Notably, crude oil imports fell to 10.97 million barrels per day, a decrease from previous months. Iron ore imports also dropped to 98.13 million tons. These reductions may be attributed to sluggish domestic growth, particularly in the construction sector, and fluctuating global commodity prices. Analysts caution against overinterpreting monthly fluctuations, which can be influenced by timing and price dynamics when cargoes were secured. There is optimism that upcoming Chinese economic stimulus measures could spur future 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 of continued “turbulence” in commodity markets for the second half of 2025. The company cites geopolitical uncertainty, high tariffs, inflationary pressures, and volatile U.S. policy changes as key factors contributing 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, and increased its dividend payout to shareholder employees from $650 million to $1.5 billion. However, profitability is trending lower compared to the 2022-2023 energy crisis peak. Company executives highlighted growing unpredictability, emphasizing that current volatility—driven by policy rather than supply-demand dynamics—is harder to capitalize on. Trafigura warns of further ‘turbulence’ in commodities markets
World Bank Forecasts Decline in Commodity Prices
The World Bank’s latest Commodity Markets Outlook forecasts a significant decline in global commodity prices over the next two years due to weakening global growth and rising trade barriers. Prices are expected to drop 12% in 2025 and a further 5% in 2026, returning to pre-COVID-19 levels observed from 2015 to 2019. While this trend may help moderate near-term inflation—previously driven by high energy prices and supply chain disruptions—it poses challenges for developing economies reliant on commodity exports. Chief Economist Indermit Gill highlighted the risks of high price volatility and urged developing nations to liberalize trade, strengthen fiscal discipline, and foster private investment. World Bank sees commodity prices falling to pre-COVID levels
Commodity Traders Expand Influence Amid Market Shifts
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 and are aggressively investing these gains to expand their influence across global supply chains. These firms are utilizing profits to diversify into assets such as power plants, petrol stations, and biofuels, while also strengthening their core oil and metals trading operations. Vitol, with profits exceeding those of BP, has expanded its asset base to own nearly 10,000 petrol stations and significant energy infrastructure across regions including the Mediterranean and Africa. Gunvor and Mercuria are likewise investing in infrastructure like refineries and gas production. 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
Market Outlook
The commodity market landscape remains complex, with various factors contributing to ongoing volatility. Stakeholders are advised to monitor economic indicators, policy developments, and trade dynamics closely to navigate the evolving market conditions effectively.
For more detailed information on commodity market trends and analyses, refer to the following sources: