Reference News, July 18 report: According to the "Nikkei Shimbun" on July 17, international commodity prices have shown a downward trend, including crude oil and agricultural products. Among international commodities sensitive to business trends, about 60% of major products have seen price declines compared to early April. Markets are wary of slowing global economic growth, and expectations that U.S. President Trump's tariff policies could trigger demand weakness further depress market conditions.

International commodities such as crude oil are at the upstream of the consumer market, and their price trends usually change before economic conditions. Therefore, commodity market dynamics are an important indicator for judging the direction of the economy: during periods of slowing economic growth, commodity prices show weakness. There have been similar situations in history, for example, during the spread of the COVID-19 pandemic globally, international commodity prices showed a downward trend.

Data from the commodity trading close on July 11 showed that compared to data on April 1, before the Trump administration announced reciprocal tariffs, 19 out of 31 commodities had seen price declines. In the same period last year, more than half of the commodities saw price increases.

Prices of energy-related commodities such as crude oil and gasoline fell significantly. The price of West Texas Intermediate (WTI) crude oil futures dropped by 3.9% compared to April 1. Due to events such as Israel attacking Iran, crude oil futures prices experienced short-term fluctuations due to geopolitical risks, but current oil prices remain within the $60.5 per barrel range.

Despite the peak season for road trips in the United States, gasoline demand has not been as strong as previous years. New York market gasoline futures prices have fallen by 5% since April.

Yoshikami Takayuki, Chief Economist of the Japan Organization for Metal and Energy Security, pointed out: "The peak of domestic consumer spending in the United States used to occur around Independence Day, but this year's consumption on that day was lower than last year. People tend to choose short trips, and gasoline consumption is limited." It is said that with high prices, American household spending is becoming more cautious, and high expenditures on leisure and entertainment have decreased.

U.S. domestic inflation has not yet subsided, and people are trying to reduce spending, plus Trump's tariff policies, which raise concerns about the world economy.

Prices of agricultural products such as soybeans have also shown weakness. As one of the important international indicators, the price of soybean futures on the Chicago Mercantile Exchange fell to as low as $9.6 per bushel on April 7, the lowest in three and a half months.

Trump announced that starting in August, he would impose a 50% reciprocal tariff on Brazil, which is a major coffee bean producer, while the U.S. is the world's largest coffee bean consumer. Under the background of tight consumer spending, the Trump administration's imposition of tariffs on imported products from Brazil may cause the coffee market to cool down. Coffee bean futures prices have declined significantly.

According to Hattori Hideki, Chief Grain Analyst at Japan Flour Company, due to Trump's tough stance, market participants' concerns about declining demand for agricultural products have increased, leading to continued price declines in agricultural products.

In industrial applications, concerns about non-metallic mineral prices are increasing. For example, nickel, used to manufacture stainless steel and electric vehicle batteries, remains in a downward trend. Copper, used to make wires and home appliances, also saw a slight decline in prices.

Among international commodities, the prices of precious metals are rising. With the intensification of global economic uncertainty, demand for gold and other precious metals as "safe assets" has significantly increased.

In April this year, as one of the important international indicators of gold prices, the price of gold futures (main contract) on the New York futures market once reached as high as $3,500 per ounce, setting a new historical high. Currently, gold prices remain in the high range of $3,300 per ounce.

Trump is informing multiple trade partners of new tariff rates, while postponing the negotiation deadline to August 1st, and discussions on tariffs have not yet yielded clear results. Nobu Kozuka, representative of the "Market Edge" company familiar with the international commodity market, said: "Trends of risk aversion and reduced demand may continue to exert downward pressure on commodities other than precious metals in the future." (Translated by Ma Xiaoyun)

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