HSBC: Trump's Re-Election May Result in Commodity Market Fragmentation
July 01, 2024 05:50:11 PM
The primary beneficiaries would be large copper producers and the economies in the Latin American region, the U.S., Australia and Indonesia.
By Paul Ploumis
SEATTLE (Scrap Monster): According to HSBC analyst, the re-election of Donald Trump as the U.S. President for a second term in the Nov. 5 elections may lead to greater fragmentation of the commodity market and increased supply disruptions.
The speculations of a potential return of Trump to the U.S. Presidency have heightened following a weak start by the current U.S. President Biden in the first round of presidential debate held last Thursday.
Paul Bloxham, chief economist for Australia, New Zealand and global commodities at HSBC noted that the commodity markets, which are already reeling under high prices on account of structural supply constraints, are also seen facing uncertainties due to geopolitical tensions. HSBC is watching out for a global macroeconomic risk in the event of a shift in the pathway of that trend. This in turn would further elevate the risk of commodity market fragmentation and result in creation of heightened supply disruption, Bloxham said.
According to HSBC, the commodity prices are predicted to stay at “permanently higher” levels and are unlikely to return to their previous trend. The primary beneficiaries would be large copper producers and the economies in the Latin American region, the U.S., Australia and Indonesia.
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