LiveWire

Arabica coffee futures on ICE traded above $1.5 per lb in July, hovering around 2016 levels, as concerns about a decline in Brazil crops due to frosts and cold air mass in coffee-growing states outweighed strong harvest in Indonesia. Also, increased demand due to the success of the vaccination rollout in the US and elsewhere, along with a strong earnings season from Starbucks, Keurig Dr Pepper, and Tata Coffee is expected to provide additional support.

In a world on the verge of seeing secular changes in infrastructure, due to an increased level of capex from the Biden bill, it is curious to look at Posco, major steel producer (4th largest company in the world by steel production) which operates in Korea. Strong steel price hike momentum led to record results amid sound industry demand, and supply squeezes from an import volume decrease. Recognition of price hike with key demand industries could be another booster of 2Q quarterly results. However it is not outlandish to expect 2Q to be a short-term peak.

Tailwinds include; delivery demand is not dropping despite reopening and vaccination progress, market share gains are likely to continue post-pandemic, and new non-restaurant partnerships support order growth post-pandemic.

As electric vehicles are becoming more and more popular and the market is facing some regulatory changes regarding emissions, Lithium, one of the main composites of cars sees its demand rising. Global Lithium demand is expected to double from 47,300 tonnes in 2020 to 117,400 tonnes in 2024. 

Natural rubber futures extended losses to 217 yen per Kg, the lowest since October 2020 dragged down by concerns about Chinese demand, automotive supply chain disruptions in the US, and surging Covid-19 infections globally. Meanwhile, the Association of Natural Rubber Producing Countries recently estimated that the world production of natural rubber in 2021 is anticipated to grow at 5.8%, year-on-year, to 13.812 million tonnes; while world demand is estimated at 6.7% growth to 13.679 million tonnes in the same reference period.