All commodity futures markets, except gold, are likely to be under pressure again this year. The pressure comes from the impact of the coronavirus strain which becomes a dark cloud for economic growth in China, Japan, and the US.

Based on Bloomberg data, throughout the year 2020, the majority of the prices of the main commodities are compact parking in the red zone. The biggest weakness was led by the price of West Texas Intermediate (WTI) oil on the Nymex exchange which fell 14.43 percent, followed by crude palm oil (CPO) on the Malaysian exchange which fell 12.53 percent.

Nickel, a commodity with the best performance last year, is now being corrected sharply to 10.66 percent year-to-date. Following nickel, zinc also fell 6.91 percent this year, then copper fell 6.62 percent, and aluminum fell 5.33 percent.

Not only that, the spread of the coronavirus which has been a negative sentiment since the beginning of the year has sent several commodities to the lowest level. Zinc on the London stock exchange in trading (2/21/2020) touched the level of US $ 2,112 per ton, the lowest since October 2016.

Commodity Prices Weakens Due to Corona Virus

Also, copper in the London stock exchange in trade (2/2/2020) broke the level of US $ 5,525 per ton, the lowest level since May 2017. The WTI oil price had touched the level of US $ 49.78 per barrel in trade (10/02/2020), the lowest level since January 2019.

Meanwhile, on Monday (2/24/2020) trading until 15.33 West Indonesia Time, WTI oil prices fell 3.17 percent at the US $ 51.69 per barrel while CPO prices dropped 1.6 percent to 2,580 ringgit per ton.

In the same trade, copper prices shrank 1.26 percent to the US $ 5,690 per ton, aluminum prices fell 0.82 percent to the US $ 1,697 per ton, nickel corrected 0.5 percent to the US $ 12,512 per ton, and zinc drooped 2.49 percent to the US $ 2,052 per ton.

The commodity futures market is difficult to get out of the shackles of weakness even though the Government of China as the world's largest importer and exporter of commodities has poured some stimulus to stimulate demand.

Oversea-Chinese Banking Corp. Singapore economist Howie Lee said that the spread of the coronavirus or covid-19 to Italy and South Korea had threatened economic growth which was initially projected to move better this year.

OPEC +, Cut Down on Production Sharp

"The fear is now increasingly pushing gold prices to move higher, and keep investors away from risky assets," Howie said as quoted by Bloomberg, Monday (2/24/2020).

BCS Global Markets analyst Kirill Chuyko said that even as China's industrial cities begin to reduce restrictions on the movement of people to restore production, in the short term production disruptions in China are likely to continue for several months.

PT Monex Investindo Futures Andian analysts said in a research publication that concerns triggered by the spread of corona outbreaks in countries other than China, such as South Korea and Japan, could potentially limit the level of demand for crude oil to run production.

"Oil prices still have the potential to go down to test the support level of US $ 50.85 per barrel to the US $ 51.65 per barrel. When it moves above the resistance level of US $ 52.60, oil has the opportunity to test the level of US $ 52.85 per barrel to the US $ 53.15 per barrel, "Andian said as quoted by his research publication, Monday (2/24/2020).

Analysts expect OPEC + to continue cutting with total production falling sharply. To note, previously OPEC and its allies have agreed to cut oil production by 2.1 million barrels per day which will end in March 2020.