(Bloomberg) — Despite fears of copper shortages, China is proving there is still plenty of industrial metal. Robusta coffee is experiencing wild price swings while posting three months of gains. And the US oil industry is seeing another major takeover.
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Here are five notable charts to consider in global commodity markets as the week gets underway.
Oil M&A
The massive wave of oil consolidation in the US continues, with ConocoPhillips last week announcing plans to acquire rival Marathon Oil Corp. to buy. The five largest deals in the sector over the past 12 months have a combined value of almost $200 billion, including debt and equity. That’s a signal that American industry is entering a new phase for these exploration and production companies. As shareholders demand growth in returns, oil bosses are buying their rivals to cut costs and extend the life of their assets so they can continue to increase buybacks and dividends for investors.
Buyer
The global copper market has been gripped by fears of a shortage, sending prices to record levels. But in China, the world’s largest producer and consumer of the refined metal, there is more than enough. Central to this disconnect are the country’s ever-expanding copper smelters. The industry is maintaining production at near-record levels – defying raw material shortages – as higher prices free up more scrap for processing.
Coffee
Robusta coffee futures have risen for a third month in a row on concerns that low inventories and reduced production next season in key grower Vietnam will keep supplies high. The most active contract peaked at $4,388 a tonne on Thursday, the highest in data dating back to 2008, before retreating. That has helped push 60-day volatility to its highest level in that period. Vietnam’s hot and dry weather has fueled concerns about the next harvest, and while rain has fallen in the Asian country’s coffee region, it cannot undo the damage caused by the drought.
Natural gas
Investment funds are the most optimistic about European gas prices since before the energy crisis, the latest sign that concerns about supplies are rising again. According to the latest data from Intercontinental Exchange Inc. the net long position in Dutch gas futures held by investment funds is at the highest level since January 2022, the month before Moscow’s invasion of Ukraine that roiled markets. The bullish bets indicate the market remains vulnerable to potential supply disruptions, including widespread maintenance at facilities in top supplier Norway and Russian gas flows through Ukraine.
Solar
This year is expected to be another record year for solar energy, with BloombergNEF predicting that 585 gigawatts of modules will be installed – almost a third more than last year. The expansion in the industry has outpaced deployment to the extent that there is a potential capacity of approximately 1,100 gigawatts across the value chain. Despite some factories shutting down for maintenance, prices for both the raw material polysilicon and the modules have reached historic lows. BNEF expects poor margins for manufacturers to persist until at least 2025.
–With help from Winnie Zhu and Doug Alexander.
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