Commodities were up again this month, with our first reference index the Bloomberg Industrial Metals subindex [BCOMINTR Index] posting +2.75% over the month and our second reference index the Bloomberg Commodity Index [BCOMTR Index] printing at +0.78% in February. Energy was the top performing complex over the month, followed by Industrial Metals and Softs. Precious Metals, Grains and Livestock were all in negative territory in February.
INDUSTRIAL METALS
Overall, tariff threats were supportive to the sector and the Industrials metals complex was positive over the month. On the economic front, there was some positive surprise coming from US manufacturing and in terms of GDP and the US continued to grow as expected. As of China, the market was in “wait & see” mode for the country’s 5th of March National People Congress and the setting of the GDP target and fiscal budget for the year. PMI prints were slightly down, and in terms of stimulus measures, the government continued to support consumption with the introduction of a 3-year plan to boost consumer confidence notably by improving the quality of goods and services and further developing of the charging infrastructure for EVs.
Finally, a depreciating USD was also supportive for industrial metals prices.
PRECIOUS METALS
The complex was in negative territory over the month, with gold not able to offset the negative performance of silver and platinum.
Strong supportive drivers remain for gold, with the US yields decline and the USD depreciating. ETF holdings of gold increased over the month and the PBoC announced further gold purchases. Also, the New-Year celebrations were supportive for prices.
Silver underperformed gold despite similar foundations. ETF holdings grew but silver may be more prone to tariffs, as Mexico is the world largest silver producer. Unlike gold, silver is not stored by central banks but on the supportive side, thanks to the energy transition the metal has a very resilient industrial demand, notably coming from solar panels and EV batteries.
EX-BENCHMARK METALS
February was not a bad month for the complex, with most ex-benchmark metals in positive territory over the month. Top performers were HRC Steel, Tin and Cobalt, with Steel Scrap still in slight negative territory. Lithium was the worst performer in the complex over the period.
BIOBASED
Over the month Lumber was well into positive territory while ethanol was down.