A global commodities rout is fueling fears of a bleak economic future

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2 years ago

July 6, 2023

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Global commodities have seen a more than 20% slump compared to the same period last year, as reflected by the S&P GSCI Commodities index.

Jung Getty | Moment | Getty Images

Prices of commodities like crude oil and iron ore have been sliding this year, underlining a continuing economic rout across the globe and possible recession risks, market watchers told CNBC.

Global commodities have seen a more than 25% slump over the last 12 months as reflected by the S&P GSCI Commodities index — a benchmark measuring the wider performance of various commodity markets.

Out of the different baskets of commodities, industrial metals have slid 3.79% during that period (up to June 30), while energy commodities like oil and gas have slipped 23%. Conversely, agricultural commodities such as grain, wheat, and sugar have gained roughly 11%.

But the overall slide for the index is likely pointing to a global economic slowdown and a recession, analysts say, as China’s Covid-19 rebound loses momentum.

“Iron ore and copper are good barometers of the very cyclical portions of the global economy, including construction and manufacturing, of which are in recession in many places,” Kpler’s Senior Commodity Analyst Reid I’Anson said via e-mail.

“It is my belief that this will flow through to a broader decline in economic activity, especially in the West,” I’Anson added.

He foresees that the U.S. will likely see a GDP contraction in the fourth quarter of this year or 2024’s first quarter, and that Europe will follow suit in three to six months.

“The failure of the Chinese economy to live up to the expectations of the market is the biggest reason commodity markets are struggling to find a footing,” I’Anson continued.

China has been posting a slew of economic data that has been weaker than market expectations, pointing to a faltering Covid reopening after years of strict lockdowns. Bank of America analysts confirm that China’s rebound has been weaker than expected.

“Especially for property, investment dropped 7% year-on-year,” said the bank’s Head of Asia-Pacific Basic Materials and Oil‎ & Gas Research, Matty Zhao. A property market decline is often associated with a drop in demand for construction materials like steel, aluminum, copper and nickel.

China’s real estate sector slump is predicted to last for years, according to Wall Street banks. And the Chinese government doesn’t look like it’s going to pursue an aggressive fiscal stimulus package, said I’Anson. Even if it does, “it would need to be sizable to impress markets at this point.”

Biggest losers, and what it means

While prices of soft commodities are rising as El Niño hammers crop output prospects, energy and industrial metals are trading a lot lower.

Among the biggest losers of the commodities slide are iron ore and oil, the analysts concur. Kpler has cited the downbeat prospects of copper as well, which acts as a proxy economic pulse check due to its various uses such as electrical equipment and industrial machinery.

Oil prices have declined significantly, with the global benchmark Brent plunging 34.76% year-on-year, even as OPEC’s output cuts come into play.

Weak energy consumption in Europe, in part due to a warm winter, has led to gas storage surging to past-five year high levels in the EU, and pushed down prices, said Zhao. Additionally, the world’s largest oil importer China, has been ramping up coal production instead amid a power crunch.

That being said, in the event of an extreme cold weather event, energy prices may recover in the second half of the year, Zhao forecasts.

According to BofA, the year-to-date average of steel and iron ore prices dropped 16% year-on-year on the back of sluggish construction demand. Poor construction demand also reflects in other building materials like cement, whose inventory levels have reached 75%.

Iron ore is primarily used to make steel, an important material in construction and engineering projects.

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“Commodities such as industrial metals tend to move lower ahead of economic leading indicators like PMIs and historically have helped signal when a downturn might occur,” said Director of Commodities and Real Assets at S&P Dow Jones Indices, Jim Wiederhold. He added that oil tends to “dip drastically” as a downturn is happening.

“In general, many major commodities slumped over the last few months as companies and consumers reduced their demand ahead of a potential economic downturn,” he said.

Commodities also tend to move in tandem with changes in inflation, Wiederhold continued. And if inflation continues to dip lower, commodity markets could see more downside in the short term, he said.

According to the International Monetary Fund, global headline inflation is poised to fall from 8.7% in 2022 to 7% in 2023.

“Given commodities are an early indicator, I’d say prices will likely struggle to find much footing until next year,” said I’Anson.

Environment

Elon Musk on Tesla’s new ‘affordable’ electric car: it’s the Model Y

Published

1 hour ago

July 24, 2025

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Elon Musk on Tesla's new 'affordable' electric car: it's the Model Y

Elon Musk has finally confirmed that Tesla’s new ‘affordable’ electric car is just going to be the Model Y in a cheaper format.

Musk has ended months of speculations and misinformation, which he partly created, about Tesla’s upcoming cheaper electric vehicle model.

Since last year, Tesla has guided “launching new affordable models” in the first half of 2025.

We are past the first half of 2025, but Tesla confirmed yesterday that the “first build” of the new model was produced in June, and it will launch later this year.

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During the shareholders’ call following the earnings results yesterday, Tesla was asked about what the new affordable model would look like. Tesla’s CFO, Vaibhav Taneja, initially stated that they wouldn’t disclose details about the design, but then Musk interrupted him and said, “It’s a Model Y.”

It’s hard to hear exactly on the call because he talked over Taneja, but he said, “the cat is out of the bag” and confirmed that the new vehicle is simply a Model Y.

Electrek has been reporting on this fact all year. We have known for months that Tesla’s upcoming “new affordable models” are Model 3 and Model Y with a stripped-down interior with fewer features, like no rear screen, and cheaper materials:

However, this fact was not accepted in the Tesla community because CEO Elon Musk falsely denied a report last year about Tesla’s “$25,000” EV model being canceled.

The facts are that Musk canceled two cheaper vehicles that Tesla was working on, commonly referred as “the $25,000 Tesla” in early 2024. Those vehicles were codenamed NV91 and NV92, and they were based on the new vehicle platform that Tesla is now reserving for the Cybercab.

Instead, Musk noticed that Tesla’s Model 3 and Model Y production lines were starting to be underutilized as the Company faced demand issues. Therefore, Tesla canceled the vehicle programs based on the new platform and decided to build new vehicles on Model 3/Y platform using the same production lines.

Now, only the new Cybercab is going to be based on the new unboxed platform.

During the conference call last night, Musk stated that the primary goal of the more affordable Model Y is to expand the market by making the vehicle more accessible to a broader audience. He suggested that it will go on sale in Q4.

Electrek’s Take

Finally, we can put this to rest. I think we can expect something similar to what Tesla did with the Model 3 in Mexico.

I think we can expect changes, such as using cloth materials instead of vegan leather, no rear display, no ambient lighting, and a lesser audio system.

In the case of the Model Y, Tesla may consider dropping some exterior lighting features, such as the light bars.

I wouldn’t be surprised also to see some powertrain changes. Maybe a less powerful RWD motor.

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Environment

This MIT spinout’s electric bricks store heat hotter than lava

Published

1 hour ago

July 24, 2025

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This MIT spinout's electric bricks store heat hotter than lava

MIT spinout electric bricks — Photo: Electrified Thermal Solutions

MIT spinout Electrified Thermal Solutions has inked a deal with HWI, a member of Calderys and one of the biggest refractory suppliers in the US, to make electrically conductive firebricks – electric bricks, or E-bricks – that store and deliver extreme heat using renewable electricity.

The innovative partnership is all about scaling up Electrified Thermal’s Joule Hive Thermal Battery, which conducts clean power and stores it as heat up to a scorching 1,800C (3,275F). That’s hot enough to drive even the most energy-hungry industrial processes like steelmaking, glass, or cement production.

The E-bricks enable factories to ditch fossil fuels and run on renewables without sacrificing performance or reliability, and at a lower cost.

The MIT-developed tech is getting paired with HWI’s 160-year track record in high-heat materials. The E-bricks will be built in HWI’s existing US plants, which means the system can scale fast using current supply chains instead of building new factories from scratch.

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Electrified Thermal expects its first commercial-scale Joule Hive system to come online this year. By 2030, the Boston-based startup wants to deploy 2 gigawatts’ worth of thermal power across industry.

“Industrial heat represents one of the most challenging frontiers in the world’s effort to address climate change,” said Daniel Stack, Electrified Thermal’s CEO and co-founder. “The majority of energy used for it worldwide still comes from burning fossil fuels. Our partnership with HWI transforms what could have been a manufacturing bottleneck into a powerful scaling advantage.”

HWI says Electrified Thermal’s E-brick is a breakthrough. “It maintains the high-temperature durability required by customers, while also generating the heat to run their processes,” said Ben Stanton, director of applications technology at HWI.

Calderys’ global VP of innovation, Bruno Touzo, added that the company is ready to help expand E-brick production across its global network. “It enables us to respond effectively to the growing demand from industries transitioning to cleaner energy solutions,” he said.

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Environment

BYD’s latest electric SUV arrives with a $20K price tag and 375 miles of range

Published

2 hours ago

July 24, 2025

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BYD's latest electric SUV arrives with a K price tag and 375 miles of range

The Chinese EV maker calls it a “high-energy super SUV.” BYD launched the Sealion 06 EV on Wednesday, a new entry-level electric SUV. It starts at just over $20,000, but BYD promises that the new Sealion 06 EV won’t feel like a base model, with advanced tech and safety features, fast charging, and a driving range of over 375 miles.

BYD launches the new Sealion 06 EV

The new midsize SUV was launched at a conference in China on Thursday in fully electric (EV) and plug-in hybrid (PHEV) powertrain options.

BYD stopped making gas-powered vehicles in 2022 and now offers EV or PHEV options across most of its lineup.

The all-electric BYD Sealion 06 EV is available in three trims, with prices ranging from 139,800 yuan ($21,000) to 163,800 yuan ($23,000). It comes in single and dual-motor variants with two BYD Blade battery pack options: 65.28 kWh and 78.72 kWh.

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The single-motor features either a 227 hp (170 kW) or 241 hp (180 kW) at the rear. With the standard (65.28 kWh) battery, the RWD variant offers a CLTC driving range of 520 km (323 miles). Upgrading to the long-range (78.72 kWh) battery provides a CLTC range of 605 km (376 miles).

The AWD variant utilizes a 241 hp (180 kW) rear motor, paired with an additional 147 hp (110 kW) motor on the front, for a combined 388 hp (290 kW). It’s also available with a range of up to 520 km (323 miles).

BYD’s new electric SUV measures 4,810 mm in length, 1,920 mm in width, and 1,675 mm in height, which is slightly larger than the Tesla Model Y.

The interior is based on an advanced version of BYD’s DiLink 100 smart cockpit, which includes a 15.6″ floating infotainment screen and a 26″ Head-up (HUD) display.

It also comes with features you won’t typically find on entry-level models, like a built-in refrigerator that can cool and heat.

Like most new BYD vehicles, it’s equipped with its God’s Eye C Intelligent Assisted Driving. The system utilizes five radars, 12 high-definition cameras, and 12 ultrasonic radars to offer over 30 safety features, including assisted driving on highways and remote parking.

Source: CarNewsChina, BYD

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