IC Market Espresso 11 Jul 2023

A Year of Contrasting Trends: Commodity Markets in 2022 and 2023

With equity values soaring since the start of the year, it’s easy to forget about commodity markets, so we decided to bring you a recap of what’s been happening with prices of select major commodities since the start of 2022, as well as a general overview of the markets.


Oil was subject to unusually high volatility in 2022 due to the Russian invasion of Ukraine. The price peaked on the 8th of March 2022, roughly 2 weeks after the invasion began, with prices going as high as 64.54% on a YTD basis for a single day. Throughout the rest of the year, oil was trading sideways, slightly decreasing due to worries about a possible economic recession, ending 2022 up 10.45% YoY. 2023 so far has painted a different picture, the price has been in a steady decline since the beginning of the year. To artificially increase the market prices of the commodity, the world’s biggest oil exporters have made production cuts, with OPEC reducing its output by 1 million barrels per day and Russia reducing its output by 500k barrels per day. Even knowing that, oil has still not shown any willingness to move upwards so far, in 2023. Currently, oil is trading at 10.9% lower on a YTD basis.


Gas, much like oil had a lot impacting its price through 2022 for the same reasons. The main difference is that Russia is the world’s biggest exporter of natural gas, meaning the invasion had more significant impacts on the price, additionally, the price of natural gas is much more prone to volatility and is generally a less stable commodity compared to oil. Gas prices peaked near the end of August, recording an eye-watering 351% YTD increase at the time in 2022, driven by countries filling up their reserves for the impending winter. After peaking in August, gas prices started a downward trajectory, primarily driven by warmer-than-anticipated weather projections, ending 2022 up only 7% on a YoY basis. Since then, the price has continued to crater. Mostly due to abnormally mild temperatures this winter that has eroded demand for energy, as well as inventories swelling, a byproduct of countries stocking up their reserves to limit geopolitical risk. At the current price, natural gas has recorded a decrease of 54.3% on a YTD basis in 2023.


With Russia and Ukraine being the 1st and 5th largest exporters of wheat in the world, it’s natural that we’d see instability in its price. Together, the combined exports of the 2 countries accounted for 27% of the world’s total wheat exports. The price of wheat peaked on the 17th of May in 2022, increasing by 58.2% on a YTD basis at the time. Shortly after, Ukraine and Russia agreed to extend a deal allowing the grain to be exported from Ukrainian ports in the Black Sea through the Black Sea Grain Deal corridor. Since the corridor was implemented, the downward trend toward pre-war levels continued. Prices ended 2022 up 13.3% on a YoY basis. Additionally, Australia setting a record-breaking harvest, 4 million metric tons above analysts’ expectations in 2022 was another driver pushing prices lower. In 2023 wheat saw a modest increase of 5.3% of YTD at current prices.


Unlike most other commodities, coffee prices weren’t a big beneficiary of the unstable geopolitics in Europe. Coffee has been on a stable downward trajectory primarily because of outstanding crop yields in Brazil and Indonesia due to good weather conditions. In 2022 coffee ended the year down 24.7%. In 2023 we saw similar price action with limited upside, at the current price coffee is down 4.4% YTD.


During 2022, steel prices have steeply gone down, primarily due to industrial production slowing down, especially in China where the real estate sector is facing significant contractions. Demand weakness through 2022 was further driven by higher energy prices, as well as fears of a potential recession in 2023. In 2022 steel heavily underperformed the market, ending the year with a 48.2% decrease YoY. However, 2023 paints a different picture, due to positive economic data, and a stronger demand outlook, brought on by the end of covid lockdowns in China, the price of steel peaked on the 12th of April in 2023, going up as much as 59.14% on a YTD basis. Since then the price has cooled down and is up 17.5% YTD.


2022 was a fantastic year if you were investing in coal with consumption reaching an all-time high and surpassing 8 billion tonnes for the first time. The invasion has steeply impacted the dynamics of the coal trade, with Russia accounting for 14.3% of the world’s exports. Droughts and heat waves in China during the summer of 2022 have further accelerated coal burning to meet a surge in power demand for air conditioning. Prices increased by as much as 169.3% on a YTD basis in September of 2022 and ended the year up 138.3% YoY. On the flip side, 2023 has been an absolutely terrible year if you remained invested. A drop in energy demand, as well as the push to curb the use of dirtier fossil fuels in favor of cleaner alternatives, has caused the price of the commodity to crater by as much as 65.4% on a YTD basis based on current prices.

Select commodities’ price change (2022 – 2023 YTD, %)

Source: Bloomberg, InterCapital Research

New BET Structure: Hidroelectrica Included

Bucharest Stock Exchange announced the new structures of the BVB indices that will include Hidroelectrica. The decision was taken by the Index Committee and will become effective tomorrow. In BVB’s main index, BET, Hidroelectrica will have 14.4% weighting.

Bucharest Stock Exchange announced the new structures of the BVB indices that will include Hidroelectrica. The decision was taken by the Index Committee. It will become effective tomorrow (12 July 2023) and the weights of the indice’s components were determined with respect to the representation factors, the price correction factors and the liquidity factors. The mentioned factors were based base on the closing prices at the end of the trading session of 7 July. In the case of Hidrelectrica (Ticker: H20 RO), the inclusion in the indices was based on the final offer price of LEI 104 per share.

Below we present you a new weighting for each BET constituent.

wdt_ID Ticker Index free float capitalization (in RON) Weight (%)
1 TLV 12.987.396.793,00 20,00
2 FP 10.464.599.833,00 16,11
3 SNP,00 15,40
4 H2O 9.355.893.394,00 14,41
5 SNG 4.792.727.544,00 7,38
6 BRD 3.679.640.015,00 5,67
7 SNN 2.732.893.680,00 4,21
8 TGN 1.742.528.912,00 2,68
9 M 1.722.533.058,00 2,65
10 DIGI 1.380.000.000,00 2,13
11 EL 1.201.466.394,00 1,85
12 ONE,00 1,64
13 TEL 733.031.420,00 1,13
14 TRP 715.147.918,00 1,10
15 TTS 686.700.000,00 1,06
16 BVB 429.829.736,00 0,66
17 WINE 356.243.400,00 0,55
18 AQ 344.640.689,00 0,53
19 SFG 287.891.103,00 0,44
20 COTE 259.033.238,00 0,40

Source: BVB, InterCapital Research

Upcoming Events – July 2023

Here you can find the dates for the upcoming events of the regional companies.

wdt_ID Date Ticker Announcement Country
8 18.7.2023 KRKG Krka ex-date Slovenia
9 20.7.2023 KRKG Krka Q2 2023 Results Slovenia
10 20.7.2023 ADPL AD Plastik General Shareholders Meeting Croatia
11 21.7.2023 PODR Podravka Q2 2023 Results Croatia
12 25.7.2023 ERNT Ericsson NT Q2 2023 Results Croatia
13 25.7.2023 ATGR Atlantic Grupa Q2 2023 Results Croatia
14 25.7.2023 TRP Teraplast Q2 2023 Results Romania
15 25.7.2023 ATPL Atlantska Plovidba Supervisory Board Meeting Croatia
16 26.7.2023 TRP Teraplast Q2 2023 Results Conference Call Romania
17 26.7.2023 ATPL Atlantska Plovidba Management Board Meeting Croatia
18 26.7.2023 ARNT Arena Hospitality Group Supervisory Board Meeting Croatia
19 27.7.2023 KOEI Končar Q2 2023 Results Croatia
20 27.7.2023 HT Hrvatski Telekom Q2 2023 Results, Conference Call for investors and analysts Croatia
21 27.7.2023 ARNT Arena Hospitality Group Q2 2023 Results Croatia
22 27.7.2023 ADPL AD Plastik Q2 2023 Results Croatia
23 28.7.2023 WINE Purcari Wineries ex-date Romania
24 28.7.2023 EQNX Equinox Q2 2023 Results Slovenia
25 28.7.2023 SNP OMV Petrom Q2 2023 Results, Conference Call Romania
26 28.7.2023 ATPL Atlantska Plovidba Q2 2023 Results Croatia
27 31.7.2023 RIVP Valamar Riviera Q2 2023 Results Croatia

Due to the nature of these events, they are subject to change (might be postponed or canceled).