* Iron ore is best performing commodity, up 140% in 2019
* Brazilian supply cuts, strong Chinese demand drove up prices
* Natural gas down 25% on record production, slowing demand
* Crude oil, palm oil, precious metals among other gainers
By Naveen Thukral and Gavin Maguire
SINGAPORE, Dec 31 (Reuters) - China’s iron ore futures topped 2019 as the best performing commodity, more than doubling in value while natural gas ranked as the biggest loser, dropping by more than a quarter.
Crude oil, Malaysian palm oil, precious metals, nickel and arabica coffee were among other gainers.
Supply disruptions played a key role in fuelling gains, ranging from a dam collapse at Vale’s iron ore mine in Brazil, crude oil export cuts by the Organization of the Petroleum Exporting Countries, and lower palm oil production in Southeast Asia.
Analysts said slowing global economic growth and expectations of a prolonged Washington-Beijing trade war are likely to be key factors driving prices next year.
“The economy isn’t that great. It has been slowing down, especially China and India,” said Tony Nunan, senior advisor for the risk management team at Mitsubishi Corp in Tokyo.
“Even though there’s this talk about Phase 1 being agreed to, it’s nowhere near what the U.S. originally wanted which was some addressing of the intellectual property rights. A lot of people feel that this trade war is going to be protracted, last longer than we think. That means the economy may be in a slow period next year.”
The White House’s trade adviser on Monday said the U.S.-China Phase 1 trade deal would likely be signed in the next week, but said confirmation would come from President Donald Trump or the U.S. Trade Representative.
The Dalian Commodity Exchange’s most-traded iron ore contract rallied more than 140%, with prices hitting a record in July before retreating as supplies increased.
Prices are widely expected to go down in 2020 as Vale’s production is likely to recover and there is uncertainty over Chinese demand growth. Some analysts see Chinese steel output growth moderating next year.
In the natural gas market, a record volume of new supply entered the market in 2019 just as the global economy slowed, curbing demand for the cleaner but comparatively more expensive fuel for power generation.
Gold prices are set to post their best year since 2010, having gained almost 20%, driven by safe-haven buying fuelled by rising geopolitical tensions and quantitative easing by major central banks.
For Malaysian palm oil, which is up more than 40% in 2019, there are concerns about lower production early next year as dry weather curbs yields across Southeast Asia.
A ban on nickel ore exports by top miner Indonesia lifted London prices more than 30% this year. But copper , widely used in power and construction, is on course to gain less than 7% as Sino-U.S. trade relations capped gains.
Copper prices in 2020 could be underpinned by easing trade tensions.
Chicago soybeans and corn futures are poised to end the year little changed, with the focus on Brazilian supplies entering the market early next year and slowing demand in China in the aftermath of African swine fever.
Wheat gained around 10% in 2019, a third straight year of annual gains, on tightening supplies in the Southern Hemisphere, especially Australia which is facing a third year of drought.
Arabica coffee rallied around 30%, Tokyo rubber added almost a fifth and New York sugar is up more than 10%.
Reporting by Naveen Thukral and Gavin Maguire; Additional reporting by Enrico dela Cruz and Florence Tan; editing by Richard Pullin