Title: The Impact of China's Economic Slowdown on Commodities Markets
Headings: The Impact of China’s Economic Slowdown on Commodities Markets
The Impact of China’s Economic Slowdown on Commodities Markets
The Recent Performance of Commodities
Agriculture
Metals
Energy
Recent Surging Chinese Imports
The Outlook for 2015
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Content: It also began unloading some of its stockpiles back onto the world market at reduced prices, which has since exerted substantial downward pressure on the prevailing world price. By November 2014, the global benchmark cotton futures price was below 60 cents per pound, the lowest since 2009, having lost more than a third of its value since May.
Along with cotton, dampening commodities demand has led to a build-up in inventories of iron ore, coal and grain, which has led to a drop in prices. China has, therefore, implemented a range of protectionist measures in an attempt to limit imports and shield local markets. Metals
In its October Commodities Market Outlook, the World Bank specifically cited demand weakness from China as a principle reason for the fall in metal prices in 2014. Due to a global market surplus of iron ore that coincided with China’s slowdown and the subsequent imposition of import barriers, the price of iron ore fell by 47 percent in 2014 and hit a five-year low of $66.84 per tonne in December. Between 2013 and 2014, Chinese demand for gold also fell significantly, causing China to drop below India as the world’s top gold consumer. The third quarter of 2014 saw the value of Chinese-gold consumer demand at $8 billion, which is a decline of 38 percent from the $13 billion posted in the same quarter of the previous year. This drop coincided with a $150-per-ounce (or 10.5-percent) drop in the world gold price between September 2013 and September 2014. Energy
According to recent government figures, coal demand in China during the first 11 months of 2014 dropped by around 2.3 percent, compared to the same period in 2013. Coal production in China and imports also fell by 2.1 percent and 9.0 percent respectively.