Ben Laidler, global markets strategist at the eToro trading and investment platform. The expert indicates that after being "the class of #activos with the worst performance of 2023, 2024 is presented as a better year, but not an excellent one for raw materials, with a modest triple boost in Chinese demand, a supply adjusted and a lower #dolar ".
The expert focuses on "sugar, cocoa and orange juice", which "have experienced a strong rebound this year, due to supply disruptions related to weather conditions and diseases." "This may continue into 2024 with a strong El Niño and continued climate change, while the carbon transition may receive a needed boost from the COP 28 climate summit in December and be underlying support for demand for 'metals.' of transition,'" he says.
Raw materials are preparing for a less bad year
A HARD YEAR:
Commodities have been the worst performing asset class of 2023 (see chart). Energy, industrial metals and agriculture are all down, with precious metals the only exception, along with niche commodities from orange juice to uranium.
The asset class was held back by China's slow reopening and the strength of the dollar, in addition to sharp price declines from natural gas to lithium. 2024 is shaping up to be a better but not great year, with a modest triple boost from Chinese demand, tight supply and a lower dollar balancing out a weaker US economy.
Commodities provide diversification and a hedge against inflation.
They have their moments of performance, with the asset class leading gains in 2021 and 2022, but longer term it is poor, with the Bloomberg broad-based commodities index lower today than it was 20 years ago. We focus on "breakfast" and "carbon transition" commodities.
DRIVERS:
China is by far the world's biggest buyer of raw materials and will increase its demand in 2024 as authorities boost fiscal spending and its housing crisis eases.
Supply will continue to be scarce after 15 years of lack of investment and shareholders preferring dividends to growth.
A slightly weaker dollar will make US dollar-denominated commodities cheaper for major buyers such as China and India. However, this will be partly offset by the sharp slowdown in the US, the world's largest economy.
FOCUS:
With over 30 #materiasprimas s on the market, we expect a wide variation in performance. We focus on "breakfast" and "carbon transition" raw materials.
Sugar, cocoa and orange juice have seen a strong rebound this year, due to supply disruptions related to weather and disease.
This may continue into 2024 with a strong El Niño and continued climate change, while the carbon transition may receive a needed boost from December's COP 28 climate summit and be underlying support for demand for "carbon metals." transition", from copper to aluminum and nickel.
These metals are the basic components, focused on China, of all kinds of products, from solar panels to electric batteries.
Source: Territorioblockchain.com
This content is for informational and educational purposes only and should not be considered investment advice or an investment recommendation. Past performance is not an indication of future results. CFDs are leveraged products and carry a high risk to your investment #capital
