Global Commodity Market Research Articles

Nexus Between Oil, Gold Price and Dxy Index on Indonesian Stock Market During Geopolitical Events (2022 – 2024)

Objective: The aim of this study is to observe the impact of oil, gold, and the DXY index on the Indonesian stock market during geopolitical events in 2022-2024. Theoretical Framework: Rising political tensions also have a major impact on global currencies, financial market and commodity market. This event lead to uncertainty which increasing the investment risk. Hence, geopolitical events could affect stock return in capital market. Method: The data used consists of daily Jakarta Composite Index (JCI) closing data, WTI daily closing prices, gold daily closing prices, and DXY closing data from 24 February 2022 – 31 December 2022 and 14 April 2024 – 30 April 2024. Data obtained form Bloomberg. The analysis technique used was GARCH (1.1). Results and Discussion: The results showed that WTI oil price changes had significant positive effects on stock return in Indonesia. However, gold price changes had insignificant positive effects on stock returns in Indonesia during geopolitical events, while the DXY Index had insignificant, negative effects. Research Implications: Investors and traders in Indonesia Stock Exchange should consider oil price changes for investing in stocks during geopolitical events. Originality/Value: This study contributes to literatures regarding the stock market turbulence during geopolitical events and its effect toward stock return. The relevance and value of this research are evidenced by the insignificanct effect of gold and DXY toward stock return, while WTI has significant effect toward stock return.

Russia-Ukraine War and Price Volatility of Global Commodities: The Role of Public Sentiments

We analysed how public sentiments have affected global commodity market volatility during the Russia-Ukraine war. Using principal component analysis, we created a sentiments index from 30 carefully selected Google trends search keywords related to the war. We tested the predictability of the sentiments index against market volatility. Our results show that while public sentiments increase commodity market volatility, incorporating the sentiment index into our predictive model significantly improves its precision.

Hybrid DE-Optimized GPR and NARX/SVR Models for Forecasting Gold Spot Prices: A Case Study of the Global Commodities Market

In this work, we highlight three different techniques for automatically constructing the dataset for a time-series study: the direct multi-step, the recursive multi-step, and the direct–recursive hybrid scheme. The nonlinear autoregressive with exogenous variable support vector regression (NARX SVR) and the Gaussian process regression (GPR), combined with the differential evolution (DE) for parameter tuning, are the two novel hybrid methods used in this study. The hyper-parameter settings used in the GPR and SVR training processes as part of this optimization technique DE significantly affect how accurate the regression is. The accuracy in the prediction of DE/GPR and DE/SVR, with or without NARX, is examined in this article using data on spot gold prices from the New York Commodities Exchange (COMEX) that have been made publicly available. According to RMSE statistics, the numerical results obtained demonstrate that NARX DE/SVR achieved the best results.

The Impact of the Regional Military Conflict in Global Stock and Commodity Market

As the crisis between Russia and Ukraine erupted, a certain degree of geopolitical risk has been triggered, which caused a significant impact on the global economy. The transmission mechanism of geopolitical risks is complex, and factors that may cause market volatility risks include trade factors, investor sentiment, relevant policies and so forth. This article will combine previous research findings and existing market data to explore the impact of the Russia-Ukraine conflict on the stock and commodity markets. Besides, it will also interpret the possible risk transmission mechanisms and consequences behind it based on statistics facts. The study found that this event had a disastrous effect on both the stock and commodity markets, but the specific direction and intensity of the fluctuations vary depending on the research subject. This article summarizes some previous research and provides a summary of the global economic impact of the Russia-Ukraine conflict and gives some suggestions to investors.

A Study of the Inner Connections Between Globalization, Modernization, and Integration Through the 19th Century

In the 19th century, Western countries opened the borders of countries that had been closed over a long period of time and connected them to a new global commodity market. In this context, the study of this paper focuses on three parts. The first part explains the reasons for the emergence of globalization in the 19th century from both material and social aspects; the second part continues to explain the fundamental reasons for the prosperity of the modernization movement from the impact of globalization; the third part studies the changes in the process of integration from the results of globalization and modernization. As the evidence shows, globalization, modernization, and integration are strongly bonded together, and they serve for world development conspicuously. These three parts are connected to each other to form a complete logical chain, which is expected to inspire today's researchers to interpret future developments in terms of globalization.

Hedging Efficiency of Energy Commodities between Indian and American Commodity Exchanges: Constant and Time-Varying Approaches

This research paper investigates the hedging efficiency between spot and future prices of crude oil and natural gas commodities in the energy category of the commodity market. The study focuses on two major commodity exchanges, the Multi Commodity Exchange of India (MCX) and the New York Mercantile Exchange (NYMEX), which serve as the global benchmarking commodity market. Various econometric models have been incorporated to measure constant and time-varying hedging efficiency, we analyze the potential of futures contracts in mitigating price risks in these markets. The results indicate significant and consistent hedge ratios for both crude oil and natural gas in both the MCX and NYMEX markets. Moreover, the MGARCH model, which assesses hedging that varies over time, demonstrates the ability to adjust hedging positions based on market changes. Johansen's co-integration test endorses the presence of enduring connections between spot and future prices in both exchanges. Traders and investors can effectively use futures contracts to mitigate price risks in energy commodity markets, ensuring more dependable financial outcomes amid price fluctuations. Additionally, policymakers can utilize these research findings to promote the adoption of futures contracts, make well-informed choices, manage risks effectively, and enhance the overall efficiency and stability of energy commodity markets.

The Economic and Financial Impacts of Feds Rate Hikes: Emerging Economy, Financial and Commodity Markets

With the fed rate hikes recently, there are many economic and financial impacts caused by it around the world. This article mainly studies the economic and financial impacts of the Fed's interest rate hike on the world, and give some relevant policies and suggestions. The Fed's interest rate hike has a huge impact on all economies around the world, especially emerging economies. At the same time, it has had a great impact on the global foreign exchange market, commodity market, and capital market. Since the Federal Reserve is in the process of raising interest rates unprecedentedly in history, the impact of this rate hike on the world is also different and deeper than before. By researching on the economic and financial impacts of the Fed's interest rate hike, this article aims to understand the Fed's interest rate hike behavior, predict the global economic situation to a certain extent and help to make better decision.

Commodity terms of trade co-movement: Global and regional factors

In this paper, we estimate a dynamic factor model with stochastic volatility to extract the latent factors that capture the commodity terms of trade co-movement across 93 countries. We decompose each country's commodity terms of trade into a global component and a regional component, depending upon the country is a commodity exporter that primarily exports fuel or non-fuel commodities. We find that the global factor can explain the bulk of terms of trade fluctuations in commodity non-exporters and fuel commodity exporters, while the regional factor is more influential among non-fuel commodity exporters. The global factor is shown to co-move with fluctuations in the global commodity market, as well as with measures of global demand and uncertainty. We further analyze the impact of shocks in factor volatilities on a sample of emerging market economies, demonstrating the different economic consequences of shocks on global and regional factors.

Economic policy uncertainty, geopolitical risks, and the heterogeneity of commodity price fluctuations in China ——an empirical study based on TVP-SV-VAR model

The combination of geopolitical conflicts and economic shocks could cause severe volatility in the global commodity market. Based on the monthly data from June 2006 to March 2023, this paper employs the TVP-SV-VAR model to investigate the time-varying impacts of economic policy uncertainty (EPU) and China's geopolitical risk (GPRC) on China's commodities prices (CCPI). The findings reveal that: (1) CCPI can be collectively influenced by EPU and GPRC shocks, with time-varying impulse responses showing notable fluctuations with alternating positive and negative values. The response of CCPI to EPU is more intense than that to GPRC shock after 2019; (2) Under the financial crisis, GPRC has a significantly positive impact on CCPI, while positive responses to global EPU and China's EPU are more pronounced under the Russia-Ukraine conflict. Under the Sino-US trade friction, the responses of CCPI to various shocks are mostly positive, with a continuing positive impact of EPU; (3) The responses of energy prices, agricultural product prices, and non-ferrous metal prices align with that of overall commodity prices. However, under the Russia-Ukraine conflict, the positive impulse responses of non-ferrous metal prices to EPU and GRPC shocks are persistent.

Effects of global liquidity and commodity market shocks in a commodity-exporting developing economy

This paper assesses the effects and transmission mechanisms of global liquidity and commodity market shocks in Mongolia, a commodity-exporting developing economy, using a structural vector autoregression (SVAR) model. Results show that boom and bust cycles in commodity and international financial markets lead to business and financial cycles in the economy as these shocks account for 30, 45, and 60 percent of domestic output, real exchange rate, and lending rate fluctuations, respectively. Commodity demand shocks have more persistent and robust effects on domestic cycles than commodity supply shocks. Trade and financial (resource export revenues, lending rate, and exchange rate) channels are essential in transmitting the shocks. Buoyant commodity demand and global liquidity shocks lead to a significant fall in the domestic lending rate, while positive commodity supply and global liquidity shocks appreciate the real exchange rate.

The use of pracaxi oil collector in the selective flotation of xenotime from silicates

Rare earth elements have played a key role in technological advancement, attracting great visibility in the global commodity market. Xenotime, a heavy rare earth resource (YPO4), can be found associated with granitic rocks, as in the Pitinga deposit, located in the Brazilian Amazon region, where the main gangue minerals are quartz, microcline and albite. This research investigates the application of a new collector produced from pracaxi oil, an Amazon oil abundant in Brazil, in the selective flotation between xenotime and its main gangue minerals. The study conducted the synthesis and characterization of the collector, the chemical, mineralogical and surface characterization of minerals, as well as the evaluation of collector adsorption and flotability via microflotation tests, zeta potential measurements, surface tension determination and XRD, WDXRF, ICP-MS, FTIR and XPS analyses. The pracaxi collector was found to be mainly composed of oleic acid (56.2%), linoleic acid (14.1%) and behenic acid (10.6%), in addition to exhibiting a critical micelle concentration (CMC) of approximately 150 mg/L. Microflotation tests indicated that the best condition for selective recovery of xenotime occur at alkaline condition (pH 9.0), presenting selectivity of approximately 90% with collector concentration of 10.0 mg/L. The zeta potential data confirmed a selective adsorption of pracaxi collector onto xenotime, with an increase in the surface charge from −30 mV to −68 mV, whereas no significant changes were detected in the silicates. The FTIR spectra showed the appearance of a band at 1545 cm−1 on the surface of the xenotime after collector adsorption, which indicates, along with the zeta potential data, the chemical nature of the adsorption. The presence of small amounts of iron in the lattice structure of silicate gangues can act as an activator, and therefore, may be responsible for the small flotability of these minerals. The performance of the pracaxi oil collector presented in this study indicates the great potential of this Amazonian oil for application in the selective flotation of xenotime ores found in the region.

Russia’s development strategy in the context of the global geo-economic paradigm shift

Aim.The presented study aims to substantiate the paradigm shift in global economic development and to identify the impact of this process on the Russian economy.Tasks.The author investigates scientific papers on the research topic; analyzes the mechanism of interaction between nominal and resource systems and substantiates the use of the dollar and the euro as world currencies as a prerequisite for determining the nominal demand system in the resource market; examines the trend of the dollar and euro losing their dominant position in the global financial system and its stability; advances arguments for a paradigm shift in global economic development and determines the impact of this process on the Russian economy in the medium and long term.Methods.This study uses the methods of analysis, synthesis, generalization, and a systems approach.Results.World economy is presented as a mechanism based on the interaction between the real and the resource systems. The increasing gap between these systems at the present time is substantiated. Arguments in favor of the existence of a stable process of de-dollarization as a prerequisite for such a gap are provided. Based on the conducted analysis, a steady trend of the dollar losing major functions of world money in certain countries and country associations that are strategically important for Russia has been revealed. The existence of a paradigm shift in global world development, which consists in replacing the demand for reserves with the demand for resources, is substantiated. It is shown that for Russia, the existing changes make it possible to effectively distribute raw energy resources from the perspective of the country’s geo-economic and geopolitical interests. It is substantiated that the export of energy commodities from Russia will be irrelevant in the long term. In conclusion, the author suggests appropriate directions for a long-term development strategy.Conclusions.Currently, there is a global economic paradigm shift, which involves demand for raw materials being replaced by demand for foreign exchange reserves. Considering Russia’s role in the global mineral commodity market, the existing changes make it possible to effectively distribute raw energy resources from the perspective of the country’s geo-economic and geopolitical interests. In the medium term, the demand for Russian hydrocarbon resources will be ensured by the growing economic potential of major importers. In the long term, the leading importers of hydrocarbons will develop renewable and hydrogen energy, which will lead to the rejection of energy imports. Thus, Russia’s long-term geo-economic strategy should focus on the development and export of scientific, technological, and innovative products.

The Making of a Periphery: How Island Southeast Asia Became a Mass Exporter of Labor

The Making of a Periphery: How Island Southeast Asia Became a Mass Exporter of Labor

Global Commodity Markets and Sovereign Risk across 150 Years

Global Commodity Markets and Sovereign Risk across 150 Years

The effect of interaction between international commodity markets and the Chinese stock market

In light of COVID-19 and the extent of global economic interdependence, it is essential to understand risk spillover effects between China's stock market and international commodity market in order to optimize risk control and management and provide early warning. The aim of this research is to examine the spillover mechanisms between the Chinese stock market and the global commodity market using data from eleven specific industries. The results show that the Risk Spillover index of industrial and optional consumer industries in China's stock market is relatively high. This industry is more vulnerable to fluctuations in the international commodity market and is the main risk spillover industry; The energy and financial industries have great risk spillover effects on the international commodity market. The volatility spillovers between the Chinese stock market and the international commodity market are asymmetric: the Chinese stock market is mainly affected by the risk spillovers from gold and silver, while the international commodity market is mainly affected by the risk spillovers from the real estate, energy, and financial sectors. The results of this analysis can be used in future works to develop a risk hedging model to examine how bulk commodities differ in terms of portfolio weight, hedging ratio, and hedging efficiency.

Haier’s Diversified Development Strategy

The article mainly starts with the basic theory of modern enterprise strategy and market diversification strategy, studies the basic theoretical achievements of market diversification strategy, and expounds the research purpose and method of this chapter. With the rapid development of the current world economy and the trend of internationalization, a relatively unified and perfect global development analysis model has been gradually established for the entire global economic environment and commodity market. The further development of diversified competition strategy will also quickly become a new hot spot in the new round of market competition. Haier Group has been actively trying to develop diversification strategies since the early 1990s. The diversified development of the company’s products gradually transited to the diversified development of the company’s products. The diversified development strategy has also brought about the development trend of Haier Group’s global turnover growth and operating profit maintaining a significant growth trend year by year. Based on the diversified economic strategy and development process of Haier Group in China, this paper briefly, objectively and truly summarizes the current situation of the development process of Haier Group’s diversified business strategy in China, analyzes the experience and lessons of Haier Group’s diversified development, and constructs a SWOT analysis model.

Effects of macro-financial shocks on bank liquidity creation: evidence from Mongolia

This paper examines the effects of macro-financial shocks on bank liquidity creation in Mongolia, a developing and commodity-exporting economy, using a structural Bayesian vector autoregression (SBVAR). Ten structural shocks (three external and seven domestic shocks) are identified using a triangular factorization. The main results are (i) the measured bank liquidity creation (as a share of total assets) is procyclical and negatively correlated with the liquidity coverage ratio in the banking sector; (ii) external shocks (the US monetary policy, Chinese economic activity, and changes in the global commodity market) have statistically significant and economically major effects on the liquidity creation. Lending rate, NPL ratio, foreign exchange reserves, and competition in the banking sector are key domestic determinants of liquidity creation; (iii) liquidity creation’s main components respond differently to the US federal funds rate and lending rate shocks. External and financial shocks have contributed to the liquidity creation passing through movements in (illiquid assets + liquid liabilities) component; (iv) monetary policy can be an effective counter-cyclical policy instrument in stabilizing the economic and financial cycles.

Backfire: how sanctions reshape the world against U.S. interests

Agathe Demarais's Backfire critically examines the effectiveness and the long-term viability of sanctions as a policy tool for coercion. The book puts forward two arguments. First, the author contends that, beyond a few high-profile successes, sanctions have failed to influence the targeted states despite inflicting significant economic harm. Second, she argues that the backlash against sanctions is intensifying. Various actors are increasingly supportive of anti-sanctions policies and practices, which undermine the effectiveness and potency of this tool of pressure. Demarais maintains that sanctions are most effective against democracies and when they have clearly outlined limited goals. Here, the author provides a valuable literature overview, which does not necessarily offer new insights. This is somewhat understandable, as Demarais does not write from an academic perspective looking to engage with the sanctions discourse. Instead, Backfire is written from the point of view of an economic forecaster and a former member of the French foreign service. Her industry perspective is illuminating when exploring how firms behave toward sanctions. Demarais aptly addresses how compliance departments interpret and interact with sanctions mandates, and she also explores the effects of individual sanctions on the global industry. Two case-studies are particularly strong: the Nord Stream II situation and the Rusal designation case. In the first, Demarais provides a deft analysis of how US sanctions on a vital hydrocarbon link between Russia and Europe strained transatlantic ties. Then, her exhaustive analysis of the Rusal case is a good example of how unpredictable sanctioning institutions integrated into the global supply chain can be. Rusal is a major aluminium manufacturer and imposing sanctions against it caused major disruptions for the global commodity market markets that US sanction practitioners did not anticipate.

Global commodity market disruption and the fallout

AbstractThe war in the breadbasket of Europe, which spawned at the heels of the once‐in‐a‐lifetime pandemic, sent major cereal prices spiralling upward. The unprecedented sequence of events leading to and including the war has tested the resilience of global commodity markets and the craftsmanship of policymakers. While the circumstances may differ, the disruption of global commodity markets is not exactly uncharted territory, with many examples and experiences from near and distant history. By showcasing anecdotal and empirical evidence from the past, this study puts the current crisis and its consequences in perspective and offers an outlook with a specific focus on low‐ and middle‐income countries.

The Rise and Volatility of Russian Winter Wheat Production

The Russian wheat industry experienced massive growth in the past two decades however, volatility in production and its subsequent impact on the global commodities market persists. In addition to significant growth, Russia surpassed the European Union as the top global exporter of wheat in 2016 and in 2020 winter wheat exports amounted to roughly $8 billion USD. The aim of this research is to investigate the observed trends and patterns of the growth in the Russian wheat production through the use of reported data on production, cropland area, yield and its associated yearly volatility. To conduct this research, statistical analysis was applied to data published by the Russian Ministry of Agriculture (RMA) and the United States Department of Agriculture Foreign Agriculture Service (USDA FAS). Statistics concerning Ukraine and Kazakhstan are included to gain a regional perspective. Results regarding Russia indicate a 149% increase in wheat production and a 35% increase in wheat farmland area with winter wheat accounting for a growing majority of this increase from 2000 to 2020. Of particular focus is yearly volatility in production of wheat, both spring and winter, which experienced significant yearly fluctuations of up to ±50% in both Russia and Ukraine. In addition, uncertainty in monthly forecasting of crop production published by the USDA FAS persists in both area and yield estimations. In Russia and Kazakhstan, USDA FAS wheat area forecasting was found to be the larger contributor to uncertainty in forecasting yearly production than yield and vice versa with Ukraine. Surging growth in the Russian wheat industry coupled with large volatility in yearly production have significant impacts on the global wheat market as well as lasting implications for land use and land cover change.