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China’s PMIs fell in July, weighed down by soft export orders. However, we think that China’s economy troughed in H1 2022, and that a modest pick-up in H2 should give some support to commodities prices . China’s official and Caixin manufacturing PMIs …
1st August 2022
Overview – While non-energy commodities prices may fall a little further, we think the big move down in those prices is now behind us. Admittedly, the demand outlook has undeniably deteriorated in recent months, but many of the supply risks that prompted …
28th July 2022
Production to remain sluggish this year Global steel production growth slowed in June as higher power costs in advanced economies contributed to lower output there. By contrast, the decline in China’s output slowed slightly. Overall, we expect global …
22nd July 2022
Supply growth to remain muted Global aluminium production ticked up again in June, but the increase was not sufficient to explain the plunge in prices last month. Base effects will mean that China’s production growth will accelerate in the second half of …
20th July 2022
As metals prices soared early in the year, we cautioned that they would end the year lower owing to soft demand growth. Prices have since plunged. Now, we think they may have a little further to fall, before finding a floor as China’s demand moves up a …
15th July 2022
Overview – Non-energy commodities prices generally fell in June on the back of concerns about the outlook for demand amid global monetary tightening and slower economic growth. Energy prices may also fall a little from here, but constrained supply will …
6th July 2022
We think that the recovery in China’s PMIs in June was driven by the lifting of virus-related restrictions rather than an improvement in underlying economic conditions. Accordingly, we think that softer growth in China’s activity will continue to weigh on …
1st July 2022
Steel production to remain lacklustre in 2022 Global steel production continued to pick up in May, led by higher output in India and China, which more than offset the ongoing decline in Europe’s production. The rise in input costs, efforts to curb carbon …
22nd June 2022
A threatened strike at Chile’s copper giant, Codelco, could knock as much as 0.3%-pts off quarterly GDP growth for every week that workers are on strike and worsen the country’s balance of payments strains. What’s more, it may not even be enough to give a …
21st June 2022
Supply is picking up, just as prices fall Global aluminium production has increased steadily since the start of the year in large part owing to a rebound in China’s output. At the same time, demand is relatively subdued, which suggests that aluminium …
20th June 2022
Robust Chinese refined metal output, alongside subdued domestic demand, has combined with constrained refined output elsewhere to provide greater export opportunities for China. But there are limits on the extent to which Chinese metal can fill the …
16th June 2022
Softer demand for steel in Europe has dragged prices lower recently, despite production in the region being constrained by high production costs. We expect prices to fall a little further to €900 per tonne by end-year from around €950 currently . The war …
9th June 2022
Overview – Energy and agricultural prices continued to rise in May as concerns about supply more than offset signs that demand, at least for energy, could soften. We expect prices to remain historically high but to start to ease back later in the year as …
7th June 2022
We expect China’s steel output to fall a little this year in line with government objectives. But we think that subdued demand, notably from the steel-intensive construction sector, will lead to lower prices for Chinese steel later in the year . The …
27th May 2022
Steel production still depressed by high energy costs Global steel production fell in y/y terms in April, as all major producers bar India recorded declines. High energy costs and soft demand for steel are both likely to persist for much of the remainder …
24th May 2022
China could ride to the rescue After a weak start to the year, it looks increasingly as though a rebound in China’s output will more than offset lower production in Russia and Europe so that global production will rise a touch this year. That said, supply …
20th May 2022
Exchange stocks of base metals have fallen so far this year as high power costs have choked the supply of refined metals. Yet, we expect stocks to build as a weaker economic outlook for key metal consuming regions will weigh on demand, and easing energy …
13th May 2022
We expect weaker electronics demand and a recovery in supply from South-East Asia to weigh on the tin price, dragging it lower by end-year to $34,000 per tonne from around $41,000 currently . The price of tin has been boosted by the pandemic in two very …
6th May 2022
Overview – The war in Ukraine and its negative impact on commodities supply has prompted us to revise up our forecasts for the prices of most commodities in 2022. Regardless of the outcome of the war, we think energy prices will remain historically high …
29th April 2022
High energy costs keep squeeze on steel production Global steel production fell in y/y terms in March, as largest producer China recorded a decline for the third consecutive month this year. Looking ahead, we expect high energy costs to act as a …
22nd April 2022
Iron ore prices have rocketed by close to 30% since the start of 2022 on supply fears. Yet, we expect cooler economic activity in China to weigh on iron ore demand, causing prices to fall by end-year. Russia and Ukraine are exporters of iron ore , and …
21st April 2022
High power costs keep a lid on aluminium output. Global aluminium output fell by 1.5% y/y in March with high power costs keeping a lid on production growth. Looking ahead, we expect regions where energy prices are more manageable to continue to increase …
20th April 2022
The latest trade data out of China suggest that recent restrictions imposed to contain the surge in new cases of COVID-19 are hitting commodity demand hard. And we think it will remain weak in the months ahead as activity in the commodity-intensive …
13th April 2022
Supply fears stemming from the war in Ukraine and risks to mine output in Latin America have pushed up the copper price. But we expect a recovery in supply and ongoing weakness in Chinese demand to send prices lower by year-end . The price of copper has …
12th April 2022
The war in Ukraine and high energy prices will keep industrial metal prices elevated for now. But once supply fears ease, the weakness in China’s demand will be exposed and will weigh on prices . Admittedly, all the current focus is on metals supply, but …
1st April 2022
Commodity prices are as volatile as they’ve ever been. We don’t think volatility will ease until the war in Ukraine ends, because only then will we know the true extent of the Russia-related supply shock . Commodity prices are naturally volatile for many …
31st March 2022
The experience of the 1970s suggests that the ongoing war in Ukraine and its effects on commodity prices will reshape commodity markets for years to come. Most immediately, elevated prices are likely to lead to some degree of demand destruction. And …
29th March 2022
We expect European steel prices to remain elevated this year given sharply higher production costs and disruption caused by lower imports from Russia and Ukraine. That said, prices should ease back from current highs on the back of subdued demand and some …
28th March 2022
Weaker China demand and high energy costs to drag on steel output Global steel production fell in y/y terms in February, driven by a double-digit contraction in China. Our expectation is that high energy costs and softer construction-led demand growth in …
22nd March 2022
Soaring energy costs to weigh on supply for some time High power prices in Europe continued to cause production curtailment in February but there were signs of a rebound in China’s production. Looking ahead, we expect supply to remain constrained for now …
21st March 2022
The high cost of energy will continue to support metals prices due to the energy-intensive nature of metal refining. If energy prices continue to climb and power rationing is introduced, we expect metal refiners to be forced to cut production, choking …
11th March 2022
The constraints on Russian supply will work in tandem with an improving demand-side picture from auto production to keep palladium prices elevated. As a result, we have revised up our price forecasts . Palladium prices have rocketed by almost 51% since …
4th March 2022
We expect that the rise in the gold price so far this year will continue in the near term as safe-haven demand builds. That said, we expect that the price will fall when/if tensions cool. But the extent to which the Central Bank of Russia (CBR) might …
1st March 2022
China’s PMIs ticked up a little in February, but the big picture is that economic growth remains lacklustre in part owing to measures to contain COVID-19. The subdued demand picture confirms that the ongoing strength in commodity prices is all about …
Restrictions on Russian trade will probably lead to lower nickel supply and keep prices elevated. As a result, we have raised our nickel price forecast, despite a relatively subdued outlook for demand . The price of nickel has rallied by 30% since …
28th February 2022
Our estimates suggest that risk premiums are currently adding around 40% to commodity prices. This suggests that commodity prices could fall a long way whenever concerns over the Russia-Ukraine conflict begin to ease, though clearly this is unlikely to …
25th February 2022
The latest twist in the Russia-Ukraine crisis is likely to keep commodity prices elevated over the coming weeks and months. And if the situation spirals into a more serious and wide-ranging conflict between Russia and the West, commodity prices could rise …
24th February 2022
Steel output starts the year on a weaker footing Global steel production fell in y/y terms in January, driven by a double-digit contraction in China. It appears that subdued demand in China is acting as a constraint on output. Our expectation of softer …
22nd February 2022
Global aluminium output off to a slow start Global aluminium output fell by 4.5% y/y in the first month of 2022. A combination of high power prices in Europe and the New Year festival in China dragged down refined aluminium production. Looking ahead, we …
21st February 2022
The recent agreement between the US and Japan will allow the majority of Japan’s steel exports to enter the US without levies. We expect this increased supply will combine with slower growth in demand to lead to further falls in US steel prices through …
15th February 2022
China’s refined metals output mostly rose in 2021, despite power rationing in Q4. We expect output growth to continue in 2022, which is a factor underpinning our view that metals prices will fall . Aluminium output in China grew by over 4% in 2021, as new …
9th February 2022
Overview – Soaring energy prices have given a renewed boost to industrial metals prices in recent months but, if we are right, and power costs ease back from April, we think prices will fall sharply later in 2022. After all, demand for metal from key …
27th January 2022
Despite power rationing, aluminium output grows in 2021 Although global aluminium output fell in y/y terms in December, it still grew strongly over 2021. The lifting of power restrictions in China has helped increase global output despite a reduction in …
20th January 2022
While high power prices and low stocks will support prices in the near term, we think that prices will pull back in the second half of 2022 as Chinese economic activity slows further and supply improves . With the exception of iron ore, the prices of most …
13th January 2022
Weak steel demand will weigh on China’s steel output for some months yet Global steel production contracted in y/y terms in November, mainly owing to depressed output in China. Although China’s power rationing came to an end last month, there are no signs …
22nd December 2021
Exchange stocks of base metals have fallen this year, as supply was interrupted by power rationing in China as well as the ongoing effects of COVID-19. However, now that power restrictions have been lifted, and with Chinese construction activity …
21st December 2021
Output to bounce back in the months ahead, despite slipping in November Despite a y/y fall in global aluminium output in November, it is still up strongly year-to-date. And it is likely to rise again from here as power restrictions in China are lifted and …
20th December 2021
We doubt that the recent jump in China’s iron ore imports is indicative of increasing demand. In fact, we expect demand for iron ore in China to cool as construction activity continues to slow and the clampdown on excess steel production continues, both …
9th December 2021
Overview – Most commodity prices have fallen in the last week or so following the identification of Omicron – a new, and potentially more transmissible, strain of COVID-19. However, while commentary has generally focused on the effects that the new strain …
7th December 2021
The sharp rise in China’s commodity imports last month could be taken as a sign that underlying demand growth is undergoing a renewed acceleration. But given that this is just one month’s data, and that other indicators point to a further softening in …