After a long time, commodity prices are on the rise. Analysts around the globe are scrambling to upgrade their forecasts as commodity prices continue to rally. This upward rally has largely been led by hard commodities, whereas soft commodity prices have been heading in the opposite direction.

Crude oil prices have seen an increase of around six percent in August 2017 on a month-on-month basis due to depleting inventory levels. However, the crude scenario is not that simple. On one hand, IEA sees stronger oil demand growth in two years. The OPEC too is signalling towards heightened demand as it discusses prolonging output cuts further into 2018. Hurricane Harvey and Irma too have raised some supply concerns as the two wreak havoc in the south of the US, lifting the crude oil prices as inventories depleted and US rig count slipped.

On the other hand, Hurricane Harvey and Irma have caused around 900,000 barrels per day drop in oil demand. According to Goldman Sachs’s estimates, the combined effects of production disruption and demand drop from Hurricane Harvey and Irma alone will lift global oil inventories by 600,000 bpd in September, further expanding the supply glut.

Coal prices are on the rise again as well due to the supply constraints from China as it has diverted towards imported coal, while curbing domestic coal supplies to tackle pollution.

Metal prices are being supported by industrial demand. Steel prices have surged due to higher global demand including improving Chinese domestic steel demand.

There has also been a sudden rally in the copper market that has driven the price of the industrial metal to its highest level in almost three years, which is partly due to the electric car revolution as well. Similarly, aluminum prices also increased recently towards a six-year high, led by China’s efforts to cut supply to curb pollution.

Soft commodities on the other hand, have been seeing a journey downhill. Despite the destructive hurricanes, cotton prices have tumbled on expectations of a bumper crop in the US, increasing the supply significantly. At the same time, the general food indices like FAO food price index have also retreated.