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Visualizing the Rise in Commodity Prices

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Rise in Commodity Prices

The Stuff that Makes Everything

If you ever wonder why commodities are important, just think of an object around you and ask yourself—what’s that made of?

From the wires in our electronic devices to the tables in our offices, these raw materials are everywhere. Of late, commodity prices have been surging as the global economy recovers, with rising demand from various industries including infrastructure, construction, and livestock.

The above infographic tracks the futures prices of 10 commodities that have seen significant price increases since January 2020.

Commodity Prices, from Bust to Boom

From lumber for home construction to metals for electronics, commodities across the three categories—agriculture, metals, and energy—have been rallying since hitting pandemic lows around March 2020.

CommodityClosing Price (Jan 1, 2020)Closing Price (May 7, 2020)% Increase
Lumber$406.7 per 1,000 board ft$1,645 per 1,000 board ft304%
Iron Ore$92.6 per tonne$197.7 per tonne114%
Soybean Oil$0.35 per lb$0.65 per lb85%
Corn$3.9 per bushel$7.3 per bushel85%
Tin$17,170 per tonne$30,950 per tonne80%
Soybeans$9.6 per bushel$15.9 per bushel66%
Copper$2.8 per lb$4.6 per lb65%
Lean Hogs$0.71 per lb$1.1 per lb56%
Palladium$1,928 per oz$2,961.5 per oz54%
Silver$18 per oz$27.6 per oz53%

Percentage increases may differ slightly due to rounding.

Among agricultural commodities, the price of lumber futures increased 304% between January 2020 and May 2021, reaching record highs. Food prices have also seen a sharp increase since the halfway point of last year. As of May 7th, the price of corn futures was at $7.3 per bushel, nearing its all-time highs of $8.3 per bushel in 2012. Furthermore, soybean oil prices were also at their highest level in the last decade.

Among metals, iron ore futures climbed 114%, reaching a record high. Tin and copper were also both moving towards all-time high prices as of May 7th, followed by palladium and silver, both of which saw more than a 50% rise in prices since January 2020.

Several commodities are either nearing or have broken past their all-time highs. Why are commodity prices increasing?

Lumber

Lumber—the form of wood that builders use to build and renovate homes—has been the talk of the town due to the massive increase in its price.

This is in stark contrast to 2019 when lumber prices were so low that some sawmill owners were better off ceasing operations. In addition to sawmill shutdowns, outbreaks of a bark-eating species of beetle have destroyed 15 years worth of log supplies in British Columbia, Canada, limiting the supply of lumber.

Meanwhile, home buyers are taking advantage of the low costs of borrowing due to record-low mortgage rates in the U.S. This is driving up the demand for lumber from the housing market, while supply is in a bottleneck.

Corn and Soybeans

Corn and soybeans are common feed grains for livestock, including swine, beef, and poultry.

China—the largest producer and consumer of pork—has been battling outbreaks of African swine fever (ASF) since 2018, losing over 100 million pigs. As the country’s hog-herd recovers from this disease, Chinese demand for corn and soybeans is increasing and supporting higher prices. In fact, China’s corn imports from the U.S. increased 2,072% between 2019 and 2020.

Iron Ore and Tin

The global economic recovery, led by China, is fueling the demand for steel, and in turn, for iron ore. On the supply side, the industry is facing a shortage, with a decline in output from top producer Vale following a disaster at its tailings dam in Brazil.

Tin prices are soaring due to rising demand from consumer electronics amid tightening supply. According to Roskill, pandemic-induced supply disruptions led to a 10% decline in refined tin output in 2020. Additionally, shipping disruptions and low stocks at the London Metal Exchange (LME) are intensifying tin’s supply squeeze.

Copper

Copper’s story is similar to that of iron ore, wherein rebounding economies are boosting demand for the red metal. However, investors are particularly bullish on copper due to its critical role in green technologies, with looming concerns over its long-term supply.

Palladium

Many countries are imposing stricter auto emission standards—and while this may surprise you, it’s driving the demand for palladium. The precious metal is a key ingredient in catalytic converters that turn toxic emissions from gas-powered vehicles into less harmful gases.

Unlike the rollercoaster rides that are commodity prices, palladium prices have been rising for five years straight. What’s more, the palladium market has seen an annual deficit since 2012. And this trend is likely to continue with flooding at palladium mines in Russia expected to cut global supply by 5% in 2021.

The Start of a Commodity Supercycle?

While it’s difficult to predict the sustainability of these high prices, the increase in commodity prices across the board has investors gearing up for a potential commodity supercycle.

Commodity supercycles are decade-long periods during which commodity prices trend above their long-term averages. The last supercycle lasted from 1996 to around 2016, driven by rapid industrialization in Brazil, India, Russia, and China (BRIC economies). Today, governments around the world are adopting mineral-intensive clean energy technologies, which will likely increase the demand for minerals for years to come.

Are we on the brink of a new commodity supercycle?

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Misc

The Elemental Composition of the Human Body

Of the 118 chemical elements found on Earth, only 21 make up the human body. Here we break down the elemental composition of the average human.

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The Elemental Composition of a Human Body

The human body is a miraculous, well-oiled, and exceptionally complex machine. It requires a multitude of functioning parts to come together for a person to live a healthy life—and every biological detail in our bodies, from the mundane to the most magical, is driven by just 21 chemical elements.

Of the 118 elements on Earth, just 21 of them are found in the human body. Together, they make up the medley of divergent molecules that combine to form our DNA, cells, tissues, and organs.

Based on data presented by the International Commission on Radiological Protection (ICRP), in the above infographic, we have broken down a human body to its elemental composition and the percentages in which they exist.

These 21 elements can be categorized into three major blocks depending on the amount found in a human body, the main building block (4 elements), essential minerals (8 elements), and trace elements (9 elements).

The Elemental Four: Ingredients for Life

Four elements, namely, oxygen, carbon, hydrogen, and nitrogen, are considered the most essential elements found in our body.

Oxygen is the most abundant element in the human body, accounting for approximately 61% of a person’s mass. Given that around 60-70% of the body is water, it is no surprise that oxygen and hydrogen are two of the body’s most abundantly found chemical elements. Along with carbon and nitrogen, these elements combine for 96% of the body’s mass.

Here is a look at the composition of the four elements of life:

ElementWeight of Body Mass (kg)Percentage of Body Mass (%)
Oxygen43 kg61.4%
Carbon16 kg22.9%
Hydrogen7.0 kg10.0%
Nitrogen1.8 kg2.6%

Values are for an average human body weighing 70 kg.

Let’s take a look at how each of these four chemical elements contributes to the thriving functionality of our body:

Oxygen

Oxygen plays a critical role in the body’s metabolism, respiration, and cellular oxygenation. Oxygen is also found in every significant organic molecule in the body, including proteins, carbohydrates, fats, and nucleic acids. It is a substantial component of everything from our cells and blood to our cerebral and spinal fluid.

Carbon

Carbon is the most crucial structural element and the reason we are known as carbon-based life forms. It is the basic building block required to form proteins, carbohydrates, and fats. Breaking carbon bonds in carbohydrates and proteins is our primary energy source.

Hydrogen

Hydrogen, the most abundantly found chemical element in the universe, is present in all bodily fluids, allowing the toxins and waste to be transported and eliminated. With the help of hydrogen, joints in our body remain lubricated and able to perform their functions. Hydrogen is also said to have anti-inflammatory and antioxidant properties, helping improve muscle function.

Nitrogen

An essential component of amino acids used to build peptides and proteins is nitrogen. It is also an integral component of the nucleic acids DNA and RNA, the chemical backbone of our genetic information and genealogy.

Essential and Supplemental Minerals

Essential minerals are important for your body to stay healthy. Your body uses minerals for several processes, including keeping your bones, muscles, heart, and brain working properly. Minerals also control beneficial enzyme and hormone production.

Minerals like calcium are a significant component of our bones and are required for bone growth and development, along with muscle contractions. Phosphorus contributes to bone and tooth strength and is vital to metabolizing energy.

Here is a look at the elemental composition of essential minerals:

ElementWeight of Body Mass (g)Percentage of Body Mass (%)
Calcium1000 g1.43%
Phosphorus780 g 1.11%
Potassium140 g0.20%
Sulphur140 g0.20%
Chlorine100 g0.14%
Sodium95 g0.14%
Magnesium19 g0.03%
Iron4.2 g0.01%

Values are for an average human body weighing 70 kg.

Other macro-minerals like magnesium, potassium, iron, and sodium are essential for cell-to-cell communications, like electric transmissions that generate nerve impulses or heart rhythms, and are necessary for maintaining thyroid and bone health.

Excessive deficiency of any of these minerals can cause various disorders in your body. Most humans receive these minerals as a part of their daily diet, including vegetables, meat, legumes, and fruits. In case of deficiencies, though, these minerals are also prescribed as supplements.

Biological Composition of Trace Elements

Trace elements or trace metals are small amounts of minerals found in living tissues. Some of them are known to be nutritionally essential, while others may be considered to be nonessential. They are usually in minimal quantities in our body and make up only 1% of our mass.

Paramount among these are trace elements such as zinc, copper, manganese, and fluorine. Zinc works as a first responder against infections and thereby improves infection resistance, while balancing the immune response.

Here is the distribution of trace elements in our body:

ElementWeight of Body Mass (mg)Percentage of Body Mass (%)
Fluorine2600 mg0.00371%
Zinc2300 mg0.00328%
Copper72 mg0.00010%
Iodine13 mg0.00002%
Manganese12 mg0.00002%
Molybdenum9.5 mg0.00001%
Selenium8 mg0.00001%
Chromium6.6 mg0.00001%
Cobalt1.5 mg0.000002%

Values are for an average human body weighing 70 kg.

Even though only it’s found in trace quantities, copper is instrumental in forming red blood cells and keeping nerve cells healthy. It also helps form collagen, a crucial part of bones and connective tissue.

Even with constant research and studies performed to thoroughly understand these trace elements’ uses and benefits, scientists and researchers are constantly making new discoveries.

For example, recent research shows that some of these trace elements could be used to cure and fight chronic and debilitating diseases ranging from ischemia to cancer, cardiovascular disease, and hypertension.

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Misc

Who’s Still Buying Fossil Fuels From Russia?

Here are the top importers of Russian fossil fuels since the start of the war.

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importers of russian fossil fuels

The Largest Importers of Russian Fossil Fuels Since the War

Despite looming sanctions and import bans, Russia exported $97.7 billion worth of fossil fuels in the first 100 days since its invasion of Ukraine, at an average of $977 million per day.

So, which fossil fuels are being exported by Russia, and who is importing these fuels?

The above infographic tracks the biggest importers of Russia’s fossil fuel exports during the first 100 days of the war based on data from the Centre for Research on Energy and Clean Air (CREA).

In Demand: Russia’s Black Gold

The global energy market has seen several cyclical shocks over the last few years.

The gradual decline in upstream oil and gas investment followed by pandemic-induced production cuts led to a drop in supply, while people consumed more energy as economies reopened and winters got colder. Consequently, fossil fuel demand was rising even before Russia’s invasion of Ukraine, which exacerbated the market shock.

Russia is the third-largest producer and second-largest exporter of crude oil. In the 100 days since the invasion, oil was by far Russia’s most valuable fossil fuel export, accounting for $48 billion or roughly half of the total export revenue.

Fossil fuelRevenue from exports (Feb 24 - June 4)% of total Russian fossil fuel export revenue
Crude oil$48.3B49.4%
Pipeline gas$25.2B25.8%
Oil products$13.6B13.9%
Liquified Natural Gas (LNG)$5.4B5.5%
Coal$5.0B5.1%
Total$97.7B100%

While Russian crude oil is shipped on tankers, a network of pipelines transports Russian gas to Europe. In fact, Russia accounts for 41% of all natural gas imports to the EU, and some countries are almost exclusively dependent on Russian gas. Of the $25 billion exported in pipeline gas, 85% went to the EU.

The Top Importers of Russian Fossil Fuels

The EU bloc accounted for 61% of Russia’s fossil fuel export revenue during the 100-day period.

Germany, Italy, and the Netherlands—members of both the EU and NATO—were among the largest importers, with only China surpassing them.

CountryValue of fossil fuel imports from Russia (Feb 24 - June 4)% of total Russian fossil fuel export revenue
China 🇨🇳$13.2B13.5%
Germany 🇩🇪$12.7B12.9%
Italy 🇮🇹$8.2B8.4%
Netherlands 🇳🇱$8.2B8.4%
Turkey 🇹🇷$7.0B7.2%
Poland 🇵🇱$4.6B4.7%
France 🇫🇷$4.5B4.6%
India 🇮🇳$3.6B3.7%
Other 🌍$35.7B36.5%
Total$97.7B100%

China overtook Germany as the largest importer, importing nearly 2 million barrels of discounted Russian oil per day in May—up 55% relative to a year ago. Similarly, Russia surpassed Saudi Arabia as China’s largest oil supplier.

The biggest increase in imports came from India, buying 18% of all Russian oil exports during the 100-day period. A significant amount of the oil that goes to India is re-exported as refined products to the U.S. and Europe, which are trying to become independent of Russian imports.

Reducing Reliance on Russia

In response to the invasion of Ukraine, several countries have taken strict action against Russia through sanctions on exports, including fossil fuels. 

The U.S. and Sweden have banned Russian fossil fuel imports entirely, with monthly import volumes down 100% and 99% in May relative to when the invasion began, respectively.

importers of russian fossil fuels

On a global scale, monthly fossil fuel import volumes from Russia were down 15% in May, an indication of the negative political sentiment surrounding the country.

It’s also worth noting that several European countries, including some of the largest importers over the 100-day period, have cut back on Russian fossil fuels. Besides the EU’s collective decision to reduce dependence on Russia, some countries have also refused the country’s ruble payment scheme, leading to a drop in imports. 

The import curtailment is likely to continue. The EU recently adopted a sixth sanction package against Russia, placing a complete ban on all Russian seaborne crude oil products. The ban, which covers 90% of the EU’s oil imports from Russia, will likely realize its full impact after a six-to-eight month period that permits the execution of existing contracts. 

While the EU is phasing out Russian oil, several European countries are heavily reliant on Russian gas. A full-fledged boycott on Russia’s fossil fuels would also hurt the European economy—therefore, the phase-out will likely be gradual, and subject to the changing geopolitical environment.

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