Chinese Commodity Carnage
Jeff Malec | May 25, 2020 08:58
With everything from Lean Hogs (-20%) to Sugar (-21%) to WTI Crude Oil (-45%) being taken to the proverbial woodshed so far in 2020, you’d be excused for thinking U.S. traded futures are the only game in town in terms of volatility and sell offs.
But there’s a few billion people over in China who may be looking at their commodity charts and saying, hold on a sec, remember we shut down our economies, too.
To see just how global this demand shock has been, we checked in on a few of the Chinese futures markets that U.S. managers we pair up with Chinese allocators are active in. The charts all have a similar top-left to bottom-right feel to them, same as our U.S. markets, but generally started selling off earlier.
Some of the biggest losers among the various Chinese futures exchanges as of the end of April included:
Now that they are starting to reopen their economies in China and Asia, whether these markets remain depressed or start to put in a U-shaped recovery will be an important sign for the rest of the world on whether there’s been some permanent demand destruction.
Here are the charts:
Bitumen
Ethylene
Palm Oil
PTA
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Rubber
Crude
Methanol
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