Commodities Update Brent-WTI spread returning to reality The gap between the cost of Brent crude and the traditional US benchmark, West Texas Intermediate (WTI), is finally closing, but the episode has been another example of how speculative pressures can... 17th November 2011 · 1 min read
Commodities Update Can China's demand offset the impact of the euro crisis? The consensus view is that continued buoyant demand from China will prevent the prices of industrial commodities, such as crude oil and copper, from falling very far, despite the worsening financial... 16th November 2011 · 1 min read
Commodities Update Is there any upside from the euro-zone crisis? Our baseline scenario is that an escalation of the crisis in the euro-zone will contribute to further large falls in almost all commodity prices over the next year or so, with gold and silver among... 15th November 2011 · 1 min read
Commodities Update How much might conflict with Iran add to oil prices? The price of a barrel of Brent could spike from current levels of around $114 to anywhere between $135 and $210 in the unlikely event of a military strike on Iran’s nuclear facilities by the US or... 14th November 2011 · 1 min read
Commodities Update Can tin producers wait long enough for higher prices? Tin is caught in a battle between Indonesian producers, who have halted exports as they wait for the metal’s price to rise from $21,500 to $25,000 per tonne, and consumers hoping exports will resume... 11th November 2011 · 1 min read
Commodities Update Rice prices to drop sharply as Thai floods recede Thailand, the world’s largest rice exporter, has lost up to a quarter of its main rice harvest due to recent floods. However, ample global stockpiles, improved harvests in other major rice producing... 11th November 2011 · 1 min read
Commodities Update China’s imports of commodities (Oct.) The recovery in China’s commodity imports continued to gather pace in October. We remain of the view that this is mainly due to importers restocking, encouraged by lower prices, rather than any... 10th November 2011 · 1 min read
Commodities Update Is gold a currency? The question of whether gold should be regarded as a “currency” might seem academic, but a discussion of the possible answers may shed some light on how best to analyse and forecast its price. Our... 9th November 2011 · 1 min read
Commodities Update Euro crisis likely to drag commodity prices much lower Our already low end-2013 forecasts for the prices of a range of major commodities, including Brent crude ($75 per barrel), copper ($5,000 per tonne) and corn (500 cents per bushel), assume that the... 3rd November 2011 · 1 min read
Commodities Update Copper bottomed? The price of copper has rallied by 20% in the past week, to over $8,000 per tonne, following its earlier steep decline. But we believe this rebound is a false dawn and continue to expect the price of... 29th October 2011 · 1 min read
Commodities Update Are commodities still a distinct asset class? The increasingly tight correlations between the prices of commodities and those of other assets, notably equities, have prompted some to question whether commodities can still be regarded as an asset... 28th October 2011 · 1 min read
Commodities Update No hard landing for China but demand outlook still poor The pick-up in China’s unofficial manufacturing PMI has eased concerns that the economy is about to crash land, but a period of relatively weak growth still lies ahead. What’s more, the latest euro... 25th October 2011 · 1 min read
Commodities Update Dollar gains to add to downward pressures on prices The prospect of further strength in the US dollar is a clear and present danger to commodity prices of all types. But if the main driver is worries about sovereign debt, gold should still outperform. 22nd October 2011 · 1 min read
Commodities Update Brent to fall further despite index rebasing (and Iran) We have been asked one or both of the same two oil-related questions by several clients this week. In summary, what are the implications of the addition of Brent to the basket for the Dow-Jones UBS... 15th October 2011 · 1 min read
Commodities Update China’s Imports of Commodities (Sep.) China’s commodity imports rose in the third quarter, particularly those of iron ore and copper. In our view, this was more a reflection of bargain-hunting rather than a strong upswing in underlying... 14th October 2011 · 1 min read
Commodities Update How big a risk is a Chinese property crash? The boom in China’s construction sector has played an important role in driving demand for industrial metals, notably copper but also steel. Although there are two good reasons why the sector should... 11th October 2011 · 1 min read