Top 6 Most Traded Commodities Globally in 2022

August 15, 2022 0 Comments

Anything from valuable and useful commodities including precious metals and energy to the less obvious and dubious things like unsecured debt and catastrophe bonds.

Despite the fact that there seems to be a limitless list of financial assets that may be exchanged, you may be asking which commodities are the most traded globally.

As a result of Russia’s invasion of Ukraine in February, commodity prices, including those for wheat, oil, natural gas, copper, and gold, continued to exhibit strong growth in the first quarter of 2022. Commodity prices rose to new multi-year highs as a result of the ensuing uncertainty. 

Most Traded Commodities 

You might be wondering what are the most traded commodities today. In this post, we’ve compiled a list for your reference if you’re planning to explore commodities trading

1. Gold or Precious Metals

The earliest method of wealth storage that has been used by civilization, gold, has remained a popular investment asset. In unpredictable times, like during conflicts and as an inflation hedge, it is still the investment of choice. The fact that gold is listed as the second most popular commodity in this article is not unexpected.

Amid a lack of certainty regarding the start of the war between Russia and Ukraine, the price of gold had risen close to its record high of more than $2,000 per ounce predicted in mid-2020 in the first quarter of 2022. As a result of the Fed’s aggressive rate hikes to combat inflation that was stronger than expected, the gold surge, however, swiftly lost its lustre by May. Since then, this year’s prices have decreased by about 5%.

Precious metals continue to be the more negative outlier, according to J.P. Morgan. The Fed and other central banks are now immediately responding with more aggressive pricing as a policy reaction, which is likely holding prices in check, despite the fact that firmer inflation may initially appear to be positive for prices.

2. Natural Gas 

Due to continuous supply issues from Russia, natural gas prices have been rising in the US, Europe, and Asia since last year. After Europe’s gas consumers were forced to find an alternative supply from the US because Russia demanded that they pay with rubles, the Russia-Ukraine war made the supply problems worse.

The competition for super-chilled LNG cargoes to Asia has intensified as a result of the rising demand from Europe. The Japan-Korean Marker (JKM), a benchmark price for LNG spot shipments into the region determined by Platts, has increased by over 27% this year.

Over 73 per cent have been added to US natural gas futures this year. According to EIA, the Henry Hub spot price increased from an average of $8.13/MMBtu in May to an average of $8.69/MMBtu in the third quarter. Low stockpiles, consistent demand for US LNG shipments, and increasing utility demand are all contributing to price increases.

3. Brent Crude Oil

In terms of contracts traded and turnover, the market for energy commodities is by far the biggest. Although there are many different energy commodities that can be exchanged, black gold is the one that is done so most frequently. While WTI is mostly traded on the CME, Brent Crude Oil is primarily traded on the ICE (Intercontinental Exchange) (Chicago Mercantile Exchange).

The Organization of the Petroleum Exporting Countries (OPEC) producing nations’ supply limits and high demand have kept the price of Brent crude oil high. At the same time, oil markets made an effort to account for the amount of Russian oil that will no longer be imported via sea by the EU starting on December 5th.

4. Silver 

Despite being a precious metal, silver is less well-liked than gold as a haven investment. Silver, however, has many industrial uses. It is employed, for example, in the creation of solar panels.

Due to global concerns, the metal rose in the first quarter of this year, following rises in other precious metals and commodities. In March, it reached a 52-week high of over $27 for an ounce. But since then, the price has kept declining.

According to David Jones, chief market strategist at Capital.com, “It’s been another disappointing performance for anyone who was expecting silver to start racing away this year.” Jones identified the short-term important level for silver as $20.40/ounce. 

5. Steel 

In 2018, there were 1,803 billion tonnes of steel produced worldwide, and the Shanghai Futures Exchange saw more than 530 million steel rebar futures contracts exchanged. On the London Metal Exchange, however, there were just 458,999 steel futures and options contracts traded in 2019.

  • The Shanghai Futures Exchange and the London Metal Exchange see the most trading activity.
  • Twenty short tons make up the contract. The term “short ton” refers to an imperial ton, which is lighter than a metric ton. A short ton weighs 2,000 pounds or 907.19 kilograms.
  • A steel of various specifications is traded on exchanges all around the world. Steel rebar, hot-rolled coil steel, scrap steel, and other materials are available.

6. Coffee and Cocoa 

Many traders overlook or forget about agricultural commodities as trading instruments. Coffee and cocoa are among the most traded and consumed commodities in the world.

The ICE traded 1,756,010 Coffee Futures Contracts in July 2020. The retail coffee industry is worth $18 billion in the United States alone. Coffee is one of the world’s most traded commodities due to its enormous global demand.

The ICE traded 1,443,289 Cocoa Futures Contracts in July 2020. Every year, nearly five million tons of cocoa beans are produced.

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