Weekly Pricing Pulse: Commodity Prices Decline on Energy Price Weakness

• The Material Price Index (MPI) by S&P Global Market Intelligence declined by 0.5% last week, marking the first decrease in three weeks.
• The decline was broad, with seven of the ten subcomponents decreasing.
• Energy markets were the primary driver of the downward movement last week, with the sub-index falling by 3.2%.
• Markets remained focused on trade developments last week after US President Donald Trump announced an increase in the tariff rate on imports from India, raising it from 25% to 50%.

Last week, markets remained focused on trade developments last week after President Trump announced an increase in the tariff rate on imports from India, raising it from 25% to 50%. This change, which set to take effect on August 21 unless a deal is reached, is significant given that India contributes about 4% of U.S. goods imports. The hike is expected to elevate the average effective tariff rate by one percentage point, further exacerbating existing inflationary pressures in the United States.

Despite concerns over persistent services inflation the Bank of England's Monetary Policy Committee (MPC) decided to cut the Bank Rate by 25 basis points to 4% to support the ailing UK economy. Recent surveys indicate economic difficulties, with inflation expected to remain above 3% through 2025. Future rate cuts are anticipated, but uncertainty persists regarding inflation dynamics and external factors, such as President Trump's tariff reforms.

This week, key economic releases include US inflation data, UK and Eurozone GDP figures and Chinese industrial production, retail sales and PMI manufacturing data.

The Material Price Index (MPI) by S&P Global Market Intelligence declined by 0.5% last week, marking the first decrease in three weeks. The decline was broad, with seven of the ten subcomponents decreasing. The MPI remains approximately 5.0% lower than it was the same week a year ago, indicating a general easing in commodity prices over the past 12 months.

Energy markets were the primary driver of the downward movement last week, with the sub-index falling by 3.2%. Brent crude oil, the international benchmark, saw a significant decline of 6.9%, averaging $67.40 per barrel for the week. This price drop can be attributed to lengthening supply after eight key OPEC+ members announced on Aug. 3 that they would increase oil supply by 547,000 b/d in September. This was almost identical to the increase for August, and somewhat less but still substantial volume increases in preceding months.

In contrast, ferrous metals price increased last week, with the sub-index up 1.6%. Average weekly iron ore prices climbed to $101.10, the first time they have been above $100 since May 2025. This uptick in iron ore prices is attributed to robust trading activities in both mainland China and Brazil, interpreted by markets as a sign the demand environment is improving. Mainland China imported 105.95 million tons of iron ore in June, marking the highest monthly figure since December 2024. Meanwhile, Brazil exported 41.1 million metric tons of iron ore in July, surpassing its all-time high set in December 2015.

—Badrul Syahmi

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.