The Periodic Table of Commodity Returns (2013-2022)
The Periodic Table of Commodity Returns (2013-2022)
Trying to predict which commodities will come out on top in any given year is tricky business—especially during this turbulent period in markets.
By looking back at previous years, investors can gain insights into long-term trends and patterns in commodity prices. To help better understand these trends, U.S. Global Investors releases a visualization called the Periodic Table of Commodity Returns at the outset of each year.
This year’s edition looks back over the past decade of returns between 2013 and 2022, and features an interactive design that allows users to sort returns by various categories including returns, volatility, and other groupings.
Editor’s note: Because of the Russia-Ukraine conflict, regional benchmarks for some commodities (coal, natural gas) had much bigger price divergences than is typical. In this case the graphic focuses in on U.S. regional benchmarks like Powder River Basin coal and Henry Hub natural gas prices. These prices may differ from price action seen around the world.
More Volatility, but Positive Returns
After 2021 saw an impressive surge in commodity prices as the world reopened post-pandemic, 2022 brought another year of positive returns for the asset class that were defined by high levels of volatility.
The broad-based S&P Goldman Sachs Commodity Index ( GSCI ) surged 52.1% in the first five months of 2022, as supply disruptions and fears across grains, metals, and energy fuels were spurred by Russia’s invasion of Ukraine.
The second half of the year saw prices cool as the U.S. continued to release crude oil from its strategic petroleum reserve while Russia and Ukraine established an agreement to enable grain and agricultural exports, quelling fears of extended supply disruptions.
The result? In the last seven months of the year the S&P GSCI nearly completed a return trip and only ended up rising 8.7% in 2022 overall.
|Natural Gas (Henry Hub)||19.97%|
|S&P Goldman Sachs Commodity Index (GSCI)||8.71%|
Another key factor that helped keep commodity prices cool in 2022 was China’s extended lockdowns which slowed down the country’s manufacturing and industrial capabilities. This helped reduce the demand of energy fuels in 2022, along with industrial metals like copper, aluminum, and zinc.
Lithium Continues to Top Commodity Returns
A metal that did shine brightly in 2022 was lithium , which has been newly added to the Periodic Table of Commodity Returns.
After topping the table in 2021 with an outsized price increase of 442.8%, lithium kept its top spot in 2022 with a more modest price increase of 72.5%.
The growing global push towards electric vehicles (EVs) has been a major contributor to the increase in demand for lithium and nickel, which was the second-best performing commodity in 2022 with a price increase of 43.1%. As more countries set targets to phase out gasoline and diesel vehicles, demand for key battery minerals like lithium and nickel is expected to continue to rise.
While the U.S. is working to strengthen its battery metals production and supply chains with $2.8 billion in grants for domestic lithium, graphite, and nickel projects, it will be years before more supply comes online as a result. In the meantime, robust demand for EVs in China has provided a constant need for these battery metals which are currently in short supply.
Energy Price Variance Fueled by Regional Uncertainty
After 2021 saw energy fuels dominate the top spots after lithium, energy fuel prices in 2022 were more volatile with more scattered returns. Natural gas was the only fuel which saw double-digit returns at a 19.9%, with crude oil returning 6.7% and coal at the bottom of the table at -48.3%.
It’s important to keep in mind how geopolitical events and supply disruptions last year affected the regional price differences for energy fuels. While WTI crude oil (North America’s benchmark) increased by 6.7% in 2022, Brent crude oil (Europe’s benchmark) was up 10.4% as Urals crude oil (Russia’s benchmark) fell by more than 26.5%.
|Type of Crude Oil||2022 Returns||Price in U.S. dollars (Jan 17, 2023)|
|Brent Crude Oil (European benchmark)||10.35%||$86.72|
|WTI Crude Oil (North American benchmark)||6.72%||$81.01|
|Urals Crude Oil (Russian benchmark)||-26.53%||$55.60|
As a result of the war and ensuing sanctions, the discount of Urals crude oil compared to Brent crude oil went from -$1.72 at the start of 2022 all the way to -$30.71 by the end of the year.
Thermal coal prices faced similar regional divergences, with Powder River Basin (PRB) coal (America’s benchmark for coal) falling by 48.3% this year while Newcastle coal, which is delivered out of the port of Newcastle, Australia primarily to various Asian nations, saw prices skyrocket up by 156.6% in 2022.
After such a wild year with huge variance in commodity prices, we’ll see if 2023 can bring some stability or if high volatility and growing regional price discrepancies will become the norm.
Charted: Global Energy Consumption by Source, and Carbon Emissions (1900-2021)
Despite the advent of renewable sources of energy, fossil fuels and their carbon emissions, haven’t gone anywhere.
Where does our energy come from, and how has this mix changed over the last 100 years?
These charts from Truman Du examine the complex relationship between energy production, consumption, and related carbon emissions using information from Our World in Data .
The World’s Energy Mix (1900-2021)
In the last 10 years, total global energy consumption has risen nearly 15% . Before that, between 2000 and 2010, it increased by nearly 25% .
And despite frequent headlines about green initiatives over the last few years, fossil fuels continue to account for the majority of total energy consumption.
In 2021, 77% of global energy was sourced from coal, oil, and gas.
Even so, renewable energy sources like wind, solar, and hydro have gained traction since the year 2000. Hydropower was the biggest renewable energy source in 2021, accounting for 6.3% of total energy consumed.
A Fossil Fuel Heavy Mix
Taking a closer look at the breakdown of energy by source, another strong (if slightly counterintuitive) trend appears to be holding its own.
Coal has remained a key source of the world’s energy consumption since 1900. Despite its relative share decreasing over time, as of 2021, coal remains the second biggest energy source, accounting for 25% of the world’s energy needs. All figures below are in TWh (terrawatt-hours).
|Global Energy Consumption||1900||1950||2000||2010||2021|
|Solar||-||-||3 TWh||94 TWh||2,702 TWh|
|Wind||-||-||93 TWh||962 TWh||4,872 TWh|
|Nuclear||-||-||7,323 TWh||7,374 TWh||7,031 TWh|
|Hydro||47 TWh||925 TWh||7,826 TWh||9,518 TWh||11,183 TWh|
|Gas||64 TWh||2,092 TWh||23,994 TWh||31,589 TWh||40,375 TWh|
|Oil||181 TWh||5,444 TWh||42,881 TWh||47,895 TWh||51,170 TWh|
|Coal||5,728 TWh||12,603 TWh||27,428 TWh||41,996 TWh||44,473 TWh|
|Total||12,131 TWh||28,564 TWh||122,745 TWh||152,966 TWh||176,431 TWh|
From its crucial role in the Industrial Revolution, to its relative cheapness and useful byproducts, coal isn’t close to being phased out anytime soon. In fact, it has seen a resurgence in powering India and China’s growing economies in the 21st century.
As fossil fuel use has increased in absolute terms, so have carbon emissions.
Carbon Emissions in 1900 vs. 2020
China, the U.S., India, Russia, and Japan are the top five emitters in the world, responsible for 60% of the world’s total emissions in 2020.
As these countries include the world’s largest economic powers, some believe emissions are a necessary byproduct of economic growth. Though there are exceptions, this seems to have held true on average, as studies show a 1% change in GDP is correlated with a 0.072 change in carbon dioxide emissions.
When looking at the chart of carbon emissions below, China’s journey of economic growth in the latter half of the 20th century exemplifies this.
China’s emissions increased dramatically, rising by six times from 1978 to 2018 alone, driven primarily by economic growth.
Here’s a breakdown of the top 50 biggest emitters in the world in 2020 versus 1900. All figures are in units of 100 million tons, and are rounded for simplicity.
|Rank||Country||1900 Emissions||Country||2020 Emissions|
The data also highlights the shift in the global economy between developed and developing economies.
In the 1900s, the largest emitters were the U.S. and other industrialized nations. In the later data set, developing economies like India, Brazil, and Indonesia have moved up the list as more significant carbon emitters as well.
The accounting for carbon emissions can change with international trade, depending on how emissions are counted and attributed.
Should emissions generated from a manufactured good be assigned to the country where the good was made, or to the place where the good was ultimately consumed? Adjusting emissions based on imports and exports can help us look at these differences.
Richer economies that import lots of goods, like the U.S., UK, or Germany tend to have higher consumption-based emissions.
Meanwhile, for high-growth countries like China, India, Iran, and South Africa, the inverse is true: their production-based emissions are higher than their consumption-based emissions.
Cumulative Carbon Emissions
When taking into account emissions from the Industrial Revolution to 2020, nearly every continent has contributed large amounts of carbon emissions—but key leaders emerge.
Here is the full breakdown:
According to the UN, the world will need to cut emissions by 32 Gt more than what countries have already promised in order to achieve the 1.5 °C target outlined in the Paris Agreement.
As you can see in this data, how or if this happens will likely be driven largely by the future of our energy sources and consumption.
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