Turnaround in the raw materials market: lithium prices return to highs, but the price of a dozen eggs drops by less than half
September saw two surprising turnarounds in raw materials. In critical minerals, the price of lithium rose 1.4%, after an accumulated drop of almost 37% in the previous four months. In the food sector, the price in dollars of a dozen eggs, after almost tripling, sank 53% on the Chicago Mercantile Exchange in the United States. On the Dalian Commodity Exchange in China, traded in yuan (the Chinese currency), the price of a dozen eggs fell by 9.4%.
Gold was also in the spotlight with the price approaching 2700 dollars per ounce during the session on September 27th, having registered a monthly increase of 5.2%. This precious metal closed on September 30th at $2659.40, a new all-time high. The price of silver rose further, 7.6%.
Globally, the CRB raw materials price index (Thomson Reuters Core Commodity Total Return Index) rose 3.3% in September, revealing a strong acceleration in relation to August (0.03%) and a near recovery from the drop in 3.8% in July. Sectorally, the behavior was different. According to the Rogers sectoral indices, energy recorded a drop of 4.5%, contrasting with a rise of 6% in metals and 5.7% in agricultural raw materials.
Price rise accelerates in September
Monthly variation of the CRB/TR index in %
The drop in the price of a barrel of Brent oil in September by 9% and the price of natural gas as a reference in Europe (TTF, traded in the Netherlands) by 1.9% had an impact on the slowdown in inflation in the euro zone to 1 .8%, below the European Central Bank’s 2% target
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Egg prices drop by more than half
After a peak of 4.4 dollars (€4) in the price of a dozen eggs on the Chicago Stock Exchange in early September, the price fell by more than half. It closed in September trading at 2.02 dollars (€1.8). After a bird flu epidemic, production recovered, increasing supply, within a framework of stabilizing demand.
The 53% drop in the price of a dozen eggs in September was the most significant drop in agricultural raw materials. The price of salmon, traded on the Swedish market, fell 10.6% and that of orange juice fell 7%.
The bulk of agricultural raw materials saw price rises in September. The sectoral index increased by 5.7%, but the prices of a basket of five commodities food items rose above 10%: oats; steak, sugar, milk and corn.
Biggest rises and falls in food raw materials
Price variation in September in %
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The gold rush
The price of an ounce of gold reached an all-time high of $2,696.90 during the session on September 27th. The price of the yellow metal rose 5.2% in September and has already soared 27% since the beginning of the year. An ounce of gold today costs almost 560 dollars more than it did at the end of last year.
Gold has become the second largest central bank asset worldwide after the dollar and has surpassed the euro. The dollar continues to dominate with 58% of reserves, but gold has risen to 18%, leaving the euro behind with 16%, according to the most recent Bank of America report.
In September, the Bank of Tanzania began purchasing 20% of gold mining. The Bank of Ghana has launched a new gold coin to increase liquidity. Russia announced that it will increase daily gold purchases by seven. At the Shanghai Gold Exchange, exporters can exchange yuan for gold. China reduced its portfolio of US Treasury bonds from $1.3 trillion in November 2023 to $776.5 billion in July 2024, according to the most recent data. In compensation, it increased gold reserves for 19 months to a maximum of 183 billion dollars in August.
The icing on the cake could be the decision to create a gold-based commercial currency during the BRICS summit in Kazan, Russia, between October 22nd and 24th.
Copper and silver were the metals that registered price increases of over 7%.
Metals on the rise
Change in prices in September in %
Global crash in energy prices
The sectoral index for energy raw materials fell 4.5% in September. The biggest drop, of more than 10%, was recorded in the price of a Russian barrel from the Urals, which closed September at $66.44, approaching the ceiling of $60 imposed by the sanctions enacted after the Russian invasion of Ukraine.
In what serves as a reference for Europe, the price of a barrel of Brent fell 9%, having fallen from 78.80 dollars at the end of August to 71.70 dollars on September 30th. Also the reference natural gas in Europe, technically known as Title Transfer Facility (TTL), traded on a virtual platform in the Netherlands, saw the price drop 1.9%.
It is sector of commodities It is, however, very sensitive to geopolitical changes. In reaction to the escalation of war in the Middle East, the price of Brent rose 3.9% in the first session of October. The Gulf region and the Red Sea are very sensitive in terms of critical routes for oil tankers and methane tankers (ships transporting liquefied natural gas). Also, the routes for container ships and bulk cargo ships that connect the Pacific and Indian Oceans to the Mediterranean and Atlantic are very sensitive to the geopolitics of that region.
