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Global Commodity Intelligence
Q2 2025 | APRIL - JUNE
Global Commodity Intelligence
Q2 2025 | APRIL - JUNE
Executive Summary
DOWNLOAD CHINESE VERSION (PDF)
Welcome to the Q2 2025 Commodity Report & Executive Summary
As Q2 2025 approaches, market dynamics continue to be influenced by global trade uncertainty. Many suppliers are engaged in extensive contingency planning due to the fluctuating status of tariffs on Mexico and Canada and the implementation of tariffs on Chinese goods. While Western suppliers navigate these challenges, domestic Chinese suppliers increasingly prioritize a "China for China" strategy, aiming to expand their market share at the expense of Western competitors.
With global trade uncertainty as a backdrop, end market demand remains relatively unchanged. AI and data center buildouts remain the most significant growth engine for hyperscalers. The largest players in this sector have committed hundreds of billions of dollars over the coming years. While the monetization of these AI capabilities is still in its infancy, we continue to see more AI-driven applications finding their way into daily business activities. In China, the electric vehicle (EV) and mobile device industries, bolstered by government subsidies, continue to drive economic growth. Meanwhile, the primary growth drivers of the previous cycle, the automotive and industrial sectors, have remained stagnant as elevated interest rates and a cautious economic outlook constrain expansion in these markets.
Global inventories have been normalized across the ecosystem, except for some high-end semiconductors and microcontrollers, who are feeling the hangover of non-cancellable/non-returnable (NCNR) business practices from the last cycle. For multi-source and commodity products, factories hover around 60-70%, slightly higher for passive families. Also, the book-to-bill ratio for passives is in the 1:1 range, while semi and other commodities remain marginally lower.
As we move into Q2, notable market trends to follow include:
- Significant market uncertainty driven by global tariffs and overall business cautiousness.
- Restoring production can take up to 13 weeks, limiting flexibility in adapting to market shifts as suppliers scale down factory capacity to align with current demand.
- With OEMs ordering within current lead time windows, the visibility to downstream business becomes muted, and harder for suppliers to plan factory loading and, in the case of semiconductor manufacturers, start wafers.
- With short lead times, lower inventory, and underutilized facilities, it wouldn’t take too much-unexpected demand to push us back into a constrained market.
The Jabil Commodity Management team will remain vigilant, closely monitoring the evolving landscape and current market dynamics to mitigate risks and enhance supply chain agility. If you have any questions, please feel free to contact the commodity management team or me directly.
Graham Scott
VP, Global Procurement
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