Commodities Experience Worst Demand Shock Since 2008, Says Goldman Sachs
RIO DE JANEIRO, BRAZIL – The world is facing the greatest commodity demand shock since the global financial crisis as a result of the coronavirus outbreak that, after rocking Asia, is spreading to the United States and Europe, according to Goldman Sachs.
The stalled economic activity in China has reduced demand for oil by an estimated four million barrels a day, compared to five million barrels during the Great Recession of 2008 and 2009, said Jeff Currie, the bank’s head of global commodity research, in a February 28th report. With new cases being reported in Europe, the Middle East and the US, the economic impact is likely to spread across the Atlantic next month.
To make matters worse, “China’s limited – though large – storage capacity is depleting rapidly, posing additional downward risks” should the stock space run out, Currie said.
For oil and other energy products, any cut in demand will be considered lost, while lower consumption of other commodities, such as steel and aluminum, could be recovered later, Currie said. Expected fiscal and monetary stimulus to save this repressed demand should lead to commodity price volatility from now on.
Gold, on the other hand, is “virus immune” and outperformed other assets viewed as safe havens, such as the Japanese Yen or the Swiss Franc, Goldman said.
Approximately 45 percent of scheduled container ship crossings from Asia to Europe have been cancelled in the four weeks after the Lunar New Year holiday in late January, Currie said. This means that Chinese activity in March may be slow to increase due to the physical reality of restarting global supply chain operations.
Source: Infomoney
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+1.64%
188,182.75
+1.64%
65,010.39
+0.44%
11,315.26
-1.14%
3,066,449
+1.05%
2,565.10
-0.02%
59,620.96
-0.05%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 188,182.75 | +1.64% | +21.85% | 185,147.15 | 168,310 | 167,142 | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| SELIC | 14.00% | — | — | — | — | — | |
| PETR4 | 41.64 | -0.05% | +35.19% | 41.66 | 41.97 | 41.15 | 41,499,400 |
| VALE3 | 72.97 | +0.83% | +30.75% | 72.37 | 73.54 | 72.66 | 17,658,000 |
| ITUB4 | 38.60 | -1.03% | +4.57% | 39.00 | 39.34 | 38.39 | 29,487,800 |
| BBDC4 | 16.85 | +0.36% | +3.50% | 16.79 | 16.90 | 16.67 | 19,416,900 |
| BBAS3 | 19.37 | +0.47% | +0.73% | 19.28 | 19.44 | 19.16 | 11,069,200 |
| B3SA3 | 14.26 | -0.21% | +12.73% | 14.29 | 14.47 | 14.11 | 33,037,800 |
| ABEV3 | 14.89 | -0.80% | +21.91% | 15.01 | 15.07 | 14.81 | 16,453,100 |
| WEGE3 | 47.59 | +0.49% | +29.99% | 47.36 | 48.08 | 47.36 | 3,364,600 |
| PRIO3 | 59.14 | -0.19% | +50.67% | 59.25 | 59.81 | 58.74 | 3,325,600 |
| SUZB3 | 41.33 | +2.35% | -23.55% | 40.38 | 41.48 | 40.35 | 3,914,900 |
| RENT3 | 34.68 | -0.09% | +0.84% | 34.71 | 34.96 | 34.35 | 7,979,100 |
| AZZA3 | 15.89 | -2.63% | -53.76% | 16.32 | 16.42 | 15.82 | 1,330,300 |
| CSNA3 | 4.30 | +0.47% | -42.65% | 4.28 | 4.41 | 4.26 | 10,076,100 |
| GGBR4 | 24.69 | +2.19% | +51.38% | 24.16 | 24.85 | 24.18 | 7,047,600 |
| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
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