recent developments of the commodity prices - hwwi · recent developments of the commodity prices...

Recent developments of thecommodity prices

AIECE spring meeting 2017Frankfurt, 4/5 May 2017

Katrin [email protected]

Hamburgisches WeltWirtschaftsInstitut (HWWI)

Structure

1. About the HWWI

2. Overview commodity price index

3. Selection of commodities

4. Development of the commodity price index

5. Index Weights

6. Recent developments on the oil market

7. Summary


About the HWWI

• Private, independent, non-profit research institute• Founded in April 2005 • Staff: About 18 people with 14 being researchers

(seniors, postgraduates etc.)• Director since 2014: Prof. Dr. Henning Vöpel• Head of departments for “Energy and Environmental

Economics” and International Economics and Trade”: Dr. André Wolf

Hamburgisches WeltWirtschaftsInstitut (HWWI) page 3

About the HWWI

• 5 Research areas, i.e.– IDEAS@HWWI– Labour, Education and Demography– Energy and Environmental Economics– International Economics and Trade– Urban and Regional Economics

page 4Hamburgisches WeltWirtschaftsInstitut (HWWI)

Overview commodity price index

• gives an overview of the current price trends in primary commodity markets

– important cost factor for consumer countries– important factor in export revenues of developing

and newly industrialising economies



• Industry & decision makers of the monetary policy are using the HWWI-index

• is included in statistical databases of national and international institutions

– Figures are calculated weekly and monthly– Historical background: Is one of the oldest commodity-indices

• It is updated regularly with daily figures being calculated once every week and is available on a paid subscription basis.




Source: Deutsche Bundesbank, monthly report February 2017


Calculated by the Laspeyres-formula

The sum of the prices of the current period is multiplied by the quantities of the base period, divided by the corresponding sum of the base period.


Selection of commodities

only unprocessed or little-processed goods included, thus excluding labour costs and other factors

Availability of international market prices

Commodities subject to market distortions like import-taxes were excluded:

Product strongly influenced by the Common Agricultural Policy (CAP) of the EU

Precious metals due to speculation


Index-Weights

Index weights reflect share in total raw material imports of the OECD countries, excluding EU-intra trade

Index 'Euroland‘ weights reflect EU17 imports from third countries (non-EUR17 countries)

Percentage of the individual commodities is adjusted every 5 years based on the total value imported into the EU based

on the OECD market statistics (HWWI Index) based on the import into the EU from other

countries (Euroland Index)


Index-WeightsWeighting of Commodities and Commodity Groups in the HWWI Index

Index, total (all commodities)2015 = 100

per cent shares WeightsHWWI-Index¹

WeightsHWWI-Index'Euroland'²

HWWI Index, total 100,00 100,00HWWI Index, total excl. energy 16,18 23,34Food total 6,63 9,71Cereals 1,49 2,07Oilseed, oils 2,42 4,60Tropical beverages, sugar 2,72 3,04Industrial raw materials 9,55 13,62Agriculture raw materials 2,32 3,08NE-Metalle³ 4,63 6,63Iron ore, scrap 6,00 3,91Energy raw materials 83,82 76,66

Coal 3,01 3,80Crude oil 80,81 72,87

¹ World imports of OECD countries minus Intra-EU trade, 2015² Imports of EU17 countries from other countries, 2015³ non-ferrous base metals


Historical Development of the HWWI- and Euroland-Index

60

70

80

90

100

110

120

130

140

15 Q1 15 Q2 15 Q3 15 Q4 16 Q1 16 Q2 16 Q3 16 Q4 17 Q1Total (all commodities) Total excl. energyFood total Industrial raw materialsEnergy raw materials

HWWI-Index US$ monthly average

Quellen: HWWI

Index 2015=100


Historical Development of the HWWI- and Euroland-Index

60

70

80

90

100

110

120

130

140

15 Q1 15 Q2 15 Q3 15 Q4 16 Q1 16 Q2 16 Q3 16 Q4 17 Q1Total (all commodities) Total excl. energyFood total Industrial raw materialsEnergy raw materials

HWWI-Euroland Index US$ monthly average

Quellen: HWWI

Index 2015=100


Actual Development Crude oil 2015


50

60

70

80

90

100

110

120

130

01.01.2015 01.01.2016 01.01.2017

crude oil

Crude oil US$ 2015

Quellen: HWWI

Index 2015 = 100



9092949698

100102104106108110

01.01.2017 01.02.2017 01.03.2017 01.04.2017 01.05.2017

crude oil

Crude oil US$ 2017

Quellen: HWWI

Index 2015 = 100



20

25

30

35

40

45

50

55

60

65

70

01.01.2015 01.01.2016 01.01.2017

crude oil price

Dubai Brent WTI

US$ / barrel

Source: macrobond, HWWI


Increasing or decreasing demand: Emerging Markets and China, world economy, outlook unstable

Decreased supply because of OPEC agreement Increasing supply because of fracking in the US based

on the current environmental policy



• December 2016:OPEC and other oil-producing countries agree on a

reduction in production with the aim of increasing oil prices

• January 2017:The targeted reduction in crude oil production has a

stabilizing effect on the crude oil price



• February 2017:In order to eliminate the doubts about the enforceability

of the reduction in the production volume, Saudi Arabia drastically reduces its own subsidies.

However, the prices did not rise as the Fracking-industry used the current prices in the US and is beginning to reuse its unused capacities



• March 2017The prices are based on:• basic reports on full crude oil storage,• further expansion of the fracking capacities • initial doubts about the long-term enforceability of

the OPEC agreement


Summary

The HWWI publishes the commodity price index

Contains selected commodities

Shows the development of the prices for the selected commodities

Can be combined with other times series to show correlation

Also shows the development of the crude oil price


Thank youfor your attention!

Visit: www.hwwi.org

Visit www.hwwi.org

recent developments of the commodity prices - hwwi · recent developments of the commodity prices...

Documents