Commodities Material Price Index

The Materials Price Index (MPI) increased by 0.2% in mid-June, following three consecutive weekly declines. Four of the 10 subcomponents fell, demonstrating a mixed tone in commodity markets.

The MPI sits around 8% higher than this time in 2023, although the second quarter of 2023 was a cyclical low in commodity markets. Energy prices were the major contributor to the increase in the headline MPI with the energy subindex rising by 1.8%. Brent crude oil, the international benchmark, climbed to $85 /barrel —a six-week high. This rise was driven by a tightened near-term supply profile as markets recognized that OPEC+ members’ voluntary production cuts will remain, despite plans to phase them out from October 2024 to September 2025. Rubber prices were the biggest downward mover, with the subindex falling by 4.4%, the biggest weekly decline since April 2021. This drop was driven by producing countries such as Thailand reaching full production capacity, leading to an oversupply, compounded by a reduction in speculative fund buying that had rallied prices in previous weeks. There was additional downward sentiment following continued concerns about the Chinese economy, particularly in the property sector, leading to a reduction in demand.

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