MARKET COMMENT
The year was overall positive for our two reference indices. Our first reference index the Bloomberg Industrial Metals subindex [BCOMINTR Index] posted +3.54% over the year while our second reference index the Bloomberg Commodity Index [BCOMTR Index] was up +5.38%. Top performing complex over the year were softs, followed by precious metals and livestock. Worst performers were grains, followed by energy and industrial metals.
Over the month of December, the BCOMINTR Index was down – 3.02% and the BCOMTR Index up at +1.02%. Energy was the strongest sector over the month as OPEC extended its output cuts. At the opposite, both industrial and precious metals suffered from a higher dollar and the eventuality of fewer Fed rate cuts for 2025. The agriculture complex was a mixed bag, with grains up over the month but softs and livestock down.
The team would like to extend its best wishes for a prosperous year and reaffirm its commitment and confidence in this product for 2025. The enduring structural drivers of the transition to a low-carbon economy are anticipated to offer significant price appreciation for transition materials on the back of (1) persistent structural imbalances in supply and demand and (2) the ongoing global commitment to transition.
INDUSTRIAL METALS
Over the year, the sector was slightly in negative territory. Positive performers in 2024 for the complex were Aluminium and Zinc while Nickel and Copper were both in negative territory over the year.
In December, the Industrial metals complex saw sentiment weighting heavily on prices, with the complex’s 2025 outlook on the world’s largest economies. The main variables for 2025 are the tariff policies of the incoming US administration and their impact on trade, demand and to some extent on global economic growth. The response from China is yet another ingredient adding to the complexity of the outlook. The back-scaling of Fed rate cuts expectations for 2025 dampened prospects of the economic boost linked to these cuts. In China, the extent of the fiscal package could positively impact commodities by boosting consumption of home appliances and equipment and investments in infrastructure could also be supportive on metals prices. This is encouraging and more details on the measures and the extent of this package should be announced in March 2025, after Trump’s inauguration.
All industrial metals commodities were in negative territory over the month.
PRECIOUS METALS
Over the year, the precious metals complex was the top contributor to performance. Both Silver and Gold contributed positively to the performance while Platinum was costly over the year.
In December, the complex was down, with all commodities of the sector posting negative performances over the month on the back of similar factors as for the industrial metals complex.
EX-BENCHMARK METALS
It seems that 2024 was not yet the year of ex-benchmark metals, as the ex-benchmark metals complex was the worst contributor to performance over the year. Zinc was the only positive contributor to performance in 2024 while Lithium, Cobalt, HRC Steel and Steel Scrap all posted negative figures.
The complex was in slight negative territory in December. Tin was the only positive performer of the complex over the month.
