Commodity Calls: Week Ending 17 January 2025

Oil tankers raise fees after US fleet sanctions, China’s State Grid plans record spending, and Westinghouse settles nuclear IP lawsuit with South Korea.

Join Global X each week for ‘Commodity Calls’ to explore all the recent signals and developments that occurred in the world of commodities.

Looking for more? Check out this week’s Market Moves and Thematic Spotlight.

Crude Oil

Bullish

  • Oil tanker fees are skyrocketing after the Biden Administration’s sanctions on the Russian crude shipping fleet.1 Roughly 160 Russian ships were blacklisted last week, rendering ~10% of the global crude-carrying fleet under embargo. Russian exports of refined oil products by sea have declined by 9.1% in 2024.
  • Crude oil is expected to lose some of its Middle Eastern war premium after Israel and Hamas reached a Gaza ceasefire and hostage release deal.2 The truce took effect on Sunday and is expected to last 42 days.
  • China’s annual refinery output dipped for the first time in more than 20 years, excluding pandemic lockdown year of 2022.3 A shift to EVs and LNG-fuelled trucks, as well as slower consumption has led to lacklustre oil demand in 2024.

Bearish

  • President-elect Donald Trump has vowed to reverse the Biden Administration’s ban on offshore oil and gas drilling.4 The current ban withdraws 625 million acres of the ocean from new development.

Explore crude oil with BCOM.

Copper

Bullish

  • Glencore and Rio Tinto are reportedly in early-stage talks for what could become the largest merger in mining history.5 If successful, the combined entity could surpass BHP as the world’s largest mining company. It would also become one of the world’s largest players in copper mining. However, significant hurdles remain, with Glencore’s coal-heavy portfolio and operations in the DRC contrasting sharply with Rio Tinto’s historically cautious approach to both.
  • The State Grid Corp. of China, the world’s largest buyer of copper, has committed to spending a record US$89 billion in 2025 to keep pace with surging renewable energy supply. Materials such as copper and steel are likely to benefit from increased grid spending in China.

Bearish

  • The flood of commodities demand from China in the tail-end of 2024 could fade.6 Analysts expect that the record level imports are down to the effects of a stimulus blitz and frontloaded shipments in preparation for Trump’s global tariffs.

Explore copper with WIRE.

Uranium

Bullish

  • Westinghouse Electric and South Korea have settled an IP dispute case that had prevented the nation from becoming a global supplier of nuclear reactors.7 Korean nuclear engineering and construction firms such as Doosan Enerbility jumped almost 5%. Korea became the preferred supplier for two Czech Republic nuclear reactors last year, making it a global presence in nuclear construction.

Bearish

  • The nuclear industry is significantly lacking in supply chain diversity, says the IEA.8 According to a new report by the IEA, of the 52 reactors that have started construction worldwide since 2017, 25 are of Chinese design and 23 Russian. Russia also accounts for 40% of global enrichment capacity, while 99% of enrichment is provided by just four suppliers.

Explore uranium with ATOM.

 

Forecasts are not guaranteed and undue reliance should not be placed on them. This information is based on views held by Global X as at 21/01/2025. Investing involves risk, including the possible loss of principal. Diversification does not ensure a profit nor guarantee against a loss.

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This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information is not intended to be individual or personalised investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.