Covid-19 Effects on Commodity Pricing

Abstract

My work is based on how COVID-19 has affected commodity prices around the world. Commodities are something we use and depend on every day whether we realize it or not and I was curious to see how this is affected by major world events. I focused my research on four separate commodities, steel, crude oil, lumber, and wheat. I gathered the spot prices for each commodity dating back to 2009 and broke the data down weekly. After normalizing the data, I graphed the results to see if they were all affected the same way. What I found was that demand during 2020 was extremely high partial due to people stockpiling items in fear of having to quarantine. What I further found was that this was one of the many reasons demands rose and reflected onto spot prices. There was also extreme variation between all of the commodities I chose. This went against my initial idea that the commodities would track each other in some way. I also found that wheat is affected hugely by the recent war between Ukraine and Russia due to Ukraine producing 10% of the world trade for this commodity.