At the start of a new year, we often take stock of commodity markets after the publication of various annual forecasts. It can be challenging to get this right – for example, 2023 did not prove to be as profitable as expected for commodities, partly because supply chains were more resilient than anticipated.
Yet, we can still form an outlook based on the information available. In 2024, the fundamentals for most commodities range from neutral to mildly bullish – despite slow growth expectations weighing on demand, trade might be bolstered by lower interest rates.
Those familiar with Samsung C&T Trading & Investment Group will know that its business interests include numerous key commodities. Let’s take a look at how some of them are expected to fare this year before explaining where Samsung C&T comes in.
Let’s start with steel, a commodity that’s strongly connected to everything from the automotive and manufacturing sectors to construction and infrastructure.
The 2024 global outlook according to Fitch Ratings is neutral, though steel markets are expected to do a little better than a year ago. We can anticipate low single-digit growth in demand in most regions, except for China, where demand is set for a slight fall.
Moving on to “Dr. Copper,” as this commodity is often known because of the way its price indicates overall economic health, the good news is that its long-term outlook is actually very positive because of demand from green industries – copper is needed for electric vehicles (EVs), EV batteries, charging stations, and renewable energy production as well as electrical wiring.
But for now, copper’s demand outlook is bearish to neutral due to economic uncertainty, according to ING, a global financial institution, with particular challenges including weak global manufacturing and China’s property slowdown.
Nickel & cobalt
You might think things can’t get much worse for nickel, which was the worst-performing metal on the London Metal Exchange in 2023 when this 2024 outlook was published by ING. But this year nickel is expected to remain pressured because of a global surplus, although – again, like copper – its long-term outlook is bright due to its role as a green metal and continued demand for EV batteries.
Another important rechargeable battery commodity, cobalt, faces a similar outlook amid struggling demand and abundant supply, according to S&P Global – but even as cobalt content in batteries has been falling, cobalt-based batteries “remain the most advanced technology, especially for EV purposes.”
Gold & silver
Now we come to precious metals, the gleam of which always seems to attract attention! Starting with a big plus, gold is set for a very positive year based on this 2024 outlook published by FX Empire. Indeed, the gold market is expected to hit record highs having already enjoyed double-digit growth in 2023. Geopolitical tensions combined with the activities of central banks are combining to strengthen the forecast.
Unfortunately for silver, its outlook is more similar to that of copper amid bearish sentiment despite being partially supported by industrial demand.
Where does Samsung C&T come in?
Samsung C&T’s traders watch all of these markets very closely while operating out of dozens of locations worldwide. They assess and respond to demand fluctuations while constantly striving to bolster supply chains through the company’s global logistics networks.
Regarding the specific commodities mentioned above, Samsung C&T is involved in a range of global steel trading operations across nearly 40 countries – and we recently got to know about stainless steel and the company’s related interests, which include production bases in Europe and China. It also continues to be active in the copper business, having built expertise in this area since 1981. Samsung C&T trades both copper cathode and concentrates, sourcing suppliers and securing demand across four continents.
Meanwhile, the company has been participating in the recycling value chain of core renewable battery materials such as nickel and cobalt, as Samsung C&T seeks to help drive the circular economy potential of these commodities while it strengthens its eco–friendly business portfolio. Moreover, the company supports the supply of precious metals by trading mining chemicals. Our recent Office Spotlight article focusing on Accra showcased the activities of Samsung C&T’s Ghana-based traders in an area once called the Gold Coast as Ghana is rich in mineral resources – and especially gold.
But our outlook for various markets doesn’t stop there – we will continue with part two of this series next month.