^{Photo: China Out/AFP.}

Global commodity markets are experiencing significant downturns, raising concerns about the health of the world economy. The S&P GSCI index, a key indicator tracking commodities across energy, metals, and agriculture sectors, has declined over 8% since April 2, 2025. This drop coincides with the escalation of trade tensions between the United States and China, two of the world's largest economies. The imposition of steep tariffs has amplified fears of a global recession, as evidenced by the sharp declines in commodity prices.​

Copper Prices Reflect Economic Uncertainty

Copper, often considered a barometer of economic health due to its widespread industrial use, has seen notable price fluctuations. New York copper futures are currently trading at approximately $8,380 per ton on the NYMEX, marking a decline of over 16% since early April. This decrease reflects concerns about reduced demand, particularly from China, the world's largest consumer of copper. Analysts from ING suggest that with U.S. growth likely to slow due to tariffs and China's ongoing economic challenges, the demand for industrial metals like copper is expected to weaken further.​

Goldman Sachs has adjusted its price forecast for copper, citing an anticipated surplus and a stagnant U.S. economy. The investment bank warns that in the event of a U.S. recession, copper prices could fall to levels seen during previous economic downturns, potentially reaching as low as $5,900 per ton. ​

Oil Prices Under Pressure from Trade Tensions and OPEC+ Decisions

Oil markets have not been immune to the effects of escalating trade disputes. Brent crude oil prices dropped below $60 per barrel for the first time since February 2021, reaching as low as $58.46 before rebounding to $64.82 following a policy reversal by President Trump. West Texas Intermediate (WTI) also experienced similar volatility, dropping to $55.10 and recovering to $62. These fluctuations were influenced by fears of reduced global demand amid trade tensions and the recent decision by the OPEC+ alliance to increase production by 411,000 barrels per day starting in May.

Goldman Sachs has revised its oil price forecasts downward, now expecting Brent crude to average $71 per barrel by December 2025. The bank attributes this adjustment to slower U.S. economic growth and increased output from OPEC+ members. Analysts caution that if OPEC+ continues to boost production beyond initial projections, oil prices could face further downward pressure.

Broader Economic Implications and Recession Fears

The decline in commodity prices is contributing to growing concerns about a potential global recession. JPMorgan forecasts a 0.3% contraction in U.S. gross domestic product (GDP) for the year, following a period of robust growth. Analysts from ING suggest that the broader move lower in crude oil prices indicates that the market is pricing in increased odds of a recession. Additionally, Fitch Solutions' research unit BMI highlights that the probability of the U.S. entering a recession has risen to over 50%, driven by escalating trade and geopolitical tensions.​

Industrial metals, particularly copper, continue to suffer as trade tensions compound with China's bleak property sector outlook. With growth in the U.S. likely to slow due to tariffs and China already struggling to revive its economy, demand for industrial metals is expected to weaken further. ​

In summary, the recent sell-off in global commodities, driven by escalating trade wars and geopolitical tensions, is flashing warning signals for the world economy. The declines in key commodities like copper and oil underscore the fragility of the current economic environment and highlight the urgent need for resolution in ongoing trade disputes to stabilize global markets.​

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