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22 tháng 1, 2024

TCKD Update - January 22, 2024: Natural Gas Plunges 24%, Robusta Coffee Stays at 16-Year High

Last week, the global commodity markets experienced a notable downturn, with most commodities in red, except for industrial materials and some metals. This divergence highlights how supply-demand factors for each commodity are now more influential than geopolitical or macroeconomic news.

The MXV-Index ended the week down 0.4%, at 2,099 points. However, trading volume remained stable at 5.1 trillion VND daily, thanks to the ability to trade in both buying and selling directions.

Key Highlights:

  • Natural Gas Decline: Natural gas futures for February on the NYMEX dropped nearly 24% to $2.52 per million British thermal units, the lowest level this year. MXV attributes this drop to lower-than-expected demand in the U.S. and Europe during the peak consumption season.

    Specifically, the U.S. Energy Information Administration (EIA) reported a withdrawal of 154 billion cubic feet from storage last week, lower than the 164 billion cubic feet forecasted by Reuters. Reuters also projects a decrease in U.S. natural gas demand, including exports, from 154.1 billion cubic feet last week to 139.9 billion cubic feet this week.

  • Industrial Materials Surge: Conversely, industrial raw materials saw gains. Sugar prices jumped more than 9%, white sugar rose over 7%, and both Robusta coffee and cocoa closed the week up by 6% from their reference prices.

    Robusta coffee is reaching a 16-year high due to disruptions in supply caused by tensions in the Red Sea affecting the main coffee-producing and consuming countries.

  • Domestic Coffee Prices: On the domestic market, as of this morning, Robusta coffee prices in the Central Highlands and Southern provinces increased significantly by 1,400 – 1,500 VND/kg compared to last week, bringing local coffee purchase prices to 72,200 – 72,900 VND/kg. This represents a doubling of the price in just one year.

Investor Insights for This Week:

  • This week will not feature many special reports, making the U.S. Q4 GDP report, scheduled for January 25, particularly significant. It will provide a final piece in the economic picture for the U.S. in 2023. After a strong 4.9% growth in Q3, Q4 GDP is forecasted to increase by only 1.8%, which could be seen as negative and may put pressure on commodities such as energy, metals, and macro-sensitive items like coffee, cocoa, and rubber.


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