Trade War Threats Shake Energy, Metals, and Agriculture Markets

As the threat of tariffs looms large, energy, metals, and agriculture markets are feeling the pressure. President Trump’s potential trade policies are causing a stir in the oil market, with prices dropping below US$80/bbl. The president has hinted at imposing tariffs on imports from Canada, Mexico, and China, sparking concerns about retaliation and trade conflicts.

In the energy sector, the outage at the Freeport LNG export terminal in the US has led to a surge in European gas prices, with TTF settling more than 4.5% higher. Europe is facing the challenge of balancing LNG imports with the loss of Russian pipeline flows and increasing demand. Germany is considering subsidizing gas storage refills to prepare for the upcoming winter.

Base metals took a hit after President Trump announced plans to impose tariffs on Mexico and Canada. The uncertainty surrounding global trade policies is weighing on industrial metals outlook, raising downside risks for the sector.

In agriculture, Brazil’s coffee production estimates for 2024/25 have been revised downwards due to adverse weather conditions. The market is closely watching the development of the 2025/26 crop amid concerns over dry weather. Soybean production and export estimates are on the rise, signaling positive growth in the sector.

Analysis:

The threat of tariffs and trade conflicts is causing volatility in energy, metals, and agriculture markets. Investors should closely monitor developments in global trade policies and their potential impact on these sectors. The energy market faces challenges with disruptions in LNG supply, while industrial metals are vulnerable to trade uncertainties. In agriculture, weather conditions continue to impact crop production, affecting supply and prices. Overall, the trade war threats are creating uncertainty in the markets, requiring investors to stay informed and adapt their strategies accordingly.

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