The most traded commodities in 2024

Commodity markets underpin the global economy, enabling the trade of raw materials to fuel industries, economies, and everyday life. High trading volumes in these markets are more than just a reflection of demand – they also signal investor sentiment and market conviction, whether optimistic or cautious.

For instance, rising trading volumes in oil may indicate confidence in industrial growth, while surges in gold trading often reflect risk aversion during economic uncertainty. However, trading volumes don’t always correlate with price direction. For example, crude oil has experienced extreme price volatility in 2024, fluctuating widely before returning to near its starting point. Despite this, it remains one of the most traded commodities, as investors react to geopolitical events, fluctuating demand, and speculative opportunities. This highlights how trading activity often reflects broader market dynamics rather than sustained price trends.

In 2024, commodities like crude oil, natural gas, gold, and agricultural products have dominated trading activity, driven by evolving energy technologies, geopolitical tensions, and global supply chain challenges. This article explores these trends and the forces shaping this year's commodities market.

Commodity sectors and their key players

Commodities are often categorised into energy, metals, and agriculture sectors, each impacted by unique demand and supply dynamics.

Energy commodities: Crude oil and natural gas

Among the most traded commodities in 2024, energy sources like crude oil and natural gas continue to dominate, driven by their essential role in powering industries, transportation, and households across the globe. Crude oil, for instance, remains highly significant in international markets due to its broad application and how its prices reflect broader economic health. Natural gas also retains a key role, with its increasing importance in balancing the transition towards greener energy sources.

Metals: Precious and base metals

In the metals category, both precious and base metals have had a notable year in terms of trading activity.

• Gold remains one of the top traded commodities, mainly due to its status as a safe-haven asset during periods of economic uncertainty. Investors continue to flock towards gold as a reliable store of value, especially amidst fluctuating interest rates and inflationary pressures observed in the latter part of 2024.
• Silver follows a similar trajectory, benefiting from investor interest while also playing an increasingly vital role in industrial applications, particularly in the tech and renewable energy sectors.

Base metals like copper and aluminium have also seen substantial trading volumes this year. Copper, critical in producing electronic components and renewable energy infrastructure, has experienced heightened demand due to expanded renewable energy projects and electric vehicle (EV) production. Aluminium, with its versatility and lightweight properties, remains in high demand for its role in the automotive and construction industries.

Lithium, an emerging leader within the commodity landscape, has gained prominence as the demand for battery production intensifies, underscoring the shift towards renewable energy and electric mobility. The surge in lithium trading reflects the broader global push towards a more sustainable energy framework.

Agricultural commodities: Wheat, soybeans, and corn

Agricultural commodities remain prominently in trading volumes, with wheat, soybeans, and corn leading the pack. These commodities form the bedrock of food production and are thus heavily traded to meet both global consumption needs and the demands of agricultural supply chains. The unpredictability of weather patterns has played a significant role in commodity trading in 2024, as changing climate conditions and disruptions in planting seasons led to fluctuations in prices and volumes for these essential products.

Regional trading patterns and influences

In 2024, regional variations in commodity trading patterns have underscored opportunities and challenges, with trading volumes shaped by a complex interplay of positive trends and negative disruptions. High trading volumes often reflect optimism and bearish sentiment, driven by economic growth, supply chain shocks, or geopolitical uncertainties. This dual dynamic is further amplified by speculative activity and traders taking short positions during periods of volatility, showcasing the intricate relationship between market sentiment and regional economic conditions.

• Europe: Europe’s ambitious push toward carbon neutrality has elevated trading volumes in metals like lithium and copper, essential for renewable energy technologies. At the same time, the region’s energy crisis, exacerbated by natural gas shortages and high electricity costs, has led to increased trading in alternative energy resources and hedging strategies. These challenges have fueled bearish sentiment in some markets, particularly for industrial metals impacted by rising production costs.
• United States: The US remains a key player in crude oil, natural gas, and agricultural commodities, driven by its strong domestic production and consumption. However, recent volatility in energy prices—caused by supply chain disruptions and geopolitical tensions—has led to speculative short positions, particularly in crude oil markets. Similarly, adverse weather events affecting crops have spurred trading activity in agricultural commodities as traders reacted to potential supply shocks.
• Asia: Asia’s high trading volumes in industrial metals such as copper and aluminium reflect its strong manufacturing base and large-scale infrastructure projects. However, economic slowdowns in certain regions, mainly China, have prompted speculative short trades as investors hedge against reduced demand for raw materials. Policy uncertainties and shifting trade dynamics have also driven volatility in key commodities, further amplifying trading activity.

Geopolitical and economic factors shaping trading volumes

In 2024, geopolitical tensions and economic shifts have been major drivers of trading volumes, reflecting a balance of long and short trades amid market volatility. These dynamics highlight how trading activity often reacts to uncertainty rather than just price direction.

• Crude Oil: Trading volumes remain high despite prices fluctuating widely and ending near their starting point. Geopolitical uncertainty, such as OPEC+ production cuts and tensions in the Middle East, fueled speculative activity, including significant short-selling.
• Natural Gas: Europe's energy crisis and reduced Russian exports have spiked natural gas trading. Volumes have been driven by fluctuating weather forecasts, storage concerns, and speculative trades tied to supply insecurity.
• Lithium and Critical Minerals: Demand for battery-critical minerals like lithium has surged, driven by a geopolitical race for resources essential to electric vehicles and renewable energy. Supply constraints in key producing regions have amplified trading activity.

These geopolitical and economic influences have positioned commodities at the intersection of global uncertainty, with traders leveraging bullish and bearish opportunities to navigate volatile markets.

Emerging trends in commodity trading

A year-on-year comparison of commodity trading reveals several interesting trends in 2024.

• Energy commodities: Crude oil and natural gas have continued to exhibit resilience despite growing concerns about carbon emissions, with demand largely supported by industrial needs and ongoing geopolitical uncertainties.
• Precious metals: Gold has maintained its status as an investor favourite amid market volatility.
• Industrial metals: Copper has seen demand bolstered by growth in green technologies, while the transition towards renewable energy has brought critical minerals like lithium and cobalt into the limelight, demonstrating an emerging pattern of increased trading activity that reflects the world's evolving energy landscape.

Factors impacting commodity trading in 2024

External factors have significantly shaped commodity trading in 2024.

• Economic conditions: Inflationary pressures and fluctuating interest rates have impacted investor behaviour, driving them towards traditionally stable commodities like gold.
• Geopolitical Events: Geopolitical events have influenced energy markets, leading to shifts in natural gas and crude oil trading volumes.
• Environmental regulations: The shift towards greener energy sources has had a notable impact, driving up demand for metals like copper, lithium, and cobalt, all of which are key to renewable energy infrastructure and EV production.

Rise of emerging commodities

One of the notable developments in commodity markets this year has been the rise of emerging commodities and changes in rankings for the most traded commodities.

• Cobalt and nickel: Minerals like cobalt and nickel have gained attention due to their vital role in producing electric vehicle batteries and renewable energy storage solutions. The growing interest in these critical minerals reflects the global emphasis on sustainability and green energy.
• Rare earth metals: Rare earth metals have seen increased trading activity, driven by their importance in manufacturing high-tech devices and clean energy technologies.

The importance of commodities in global markets

The role of commodities in global markets must be recognized, with their significance reaching across various sectors and industries.

• Energy commodities: The demand for energy commodities such as crude oil and natural gas underscores the importance of stable energy supplies for economic growth.
• Metals: The focus on metals like copper and lithium highlights the accelerating transition towards renewable energy and technological innovation.
• Agricultural products: Agricultural products remain vital to ensuring food security for a growing global population.

Risks and opportunities in commodity trading

In terms of risks and benefits, it is essential to understand the inherent volatility associated with commodity trading.

• Volatility and risks: While commodities offer diversification opportunities and can act as a hedge against inflation, their prices are highly susceptible to external shocks, including geopolitical tensions, changes in government policies, and unpredictable weather patterns.
• Opportunities for growth: Despite the risks, opportunities abound in the commodities markets for those who stay informed about underlying trends and market drivers. The demand for metals tied to renewable energy and electric vehicle production presents significant growth potential, while traditional commodities like crude oil and gold continue to hold their place as indispensable assets.

Conclusion

The commodities market in 2024 reflects a world in transition—balancing the established dominance of energy commodities like crude oil with the rise of new players such as lithium and other critical minerals essential for green technologies. The varied trading activity across the United States, Europe, and Asia highlights the regional nuances defining the commodities markets. At the same time, the impact of economic conditions, geopolitical tensions, and environmental shifts continues to drive significant changes in trading patterns. The evolution of commodity markets will undoubtedly be influenced by technological advancements and policy changes as countries and industries seek more sustainable solutions for future growth. Traders looking to navigate this dynamic landscape must stay informed about emerging trends and risks while capitalising on the opportunities a rapidly changing global economy presents.

Common questions around the most traded commodities

What are the most traded commodities in 2024?

The most traded commodities in 2024 include energy sources like crude oil and natural gas, metals such as gold, copper, and lithium, and agricultural products like wheat, soybeans, and corn. These commodities are driven by factors such as global energy demands, technological advancements, and the need for food security.

Why is crude oil still a top traded commodity despite the shift towards renewable energy?

Crude oil remains a top-traded commodity because it continues to play a critical role in powering industries, transportation, and households globally. The demand for crude oil is supported by industrial needs and ongoing geopolitical uncertainties, which have maintained its importance in the global economy.

What roles do metals like lithium and cobalt play in commodity trading in 2024?

Lithium and cobalt are increasingly important in commodity trading due to their critical role in the production of electric vehicle batteries and renewable energy storage solutions. The global emphasis on sustainability and green energy has driven up demand for these metals, making them prominent in trading volumes.

How have geopolitical events influenced commodity trading in 2024?

Geopolitical events have significantly influenced commodity trading by affecting the supply chains of key commodities. For example, natural gas trading volumes have spiked due to political tensions and disruptions in energy distribution, particularly in Europe, while increased competition for critical minerals has also impacted trading patterns.

What are the risks and opportunities associated with commodity trading?

Commodity trading involves risks such as price volatility due to external shocks, including geopolitical tensions, government policy changes, and unpredictable weather patterns. However, opportunities exist, particularly in the growing demand for metals tied to renewable energy and electric vehicle production, which presents significant growth potential for traders.