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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
Commodity import volumes revived a little in May, perhaps as virus-related restrictions started to ease. Although demand should pick up in tandem with activity as major cities re-open, we think that high prices and slower export growth will mean that …
Demand holding up, for now Commercial crude oil stocks rose this week owing to an unusually large release from the strategic reserve and a slump in crude exports. Interestingly, implied product demand ticked up, after being relatively subdued for a few …
8th 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
Despite a rise in May, China’s PMIs still point to weak Chinese demand, which will continue to weigh on industrial metals prices. However, the war in Ukraine will remain the bigger driver of energy prices. China’s official and Caixin manufacturing PMIs …
1st June 2022
Global refinery capacity is stretched with less of Russia’s capacity at work Slack should return if Russia re-routes some of its petroleum product exports But unplanned refinery outages will now remain a bigger risk to crude oil demand In this Energy …
31st May 2022
The EU’s sixth round of sanctions on Russia marks yet another defining moment in the West’s detachment from Russia’s energy trade. The sanctions were widely telegraphed in advance, though, so for now we still forecast that crude oil prices will remain …
Disruption to supply rather than strong demand has pushed prices higher Ample stocks and bearish financial market backdrop create potential for sharp price fall But the risk premia will be structurally higher in agricultural prices going forward The last …
A persistent theme in energy markets is uncertainty about the outlook for the EU’s imports of energy from Russia . It does appear that some sort of embargo of oil imports will be announced, maybe as early as next week. However, this is not new news and is …
27th May 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 …
Commercial stocks to continue to lean on strategic reserves for support Commercial crude oil stocks fell again last week, but at a slower pace. Once again, lower net imports and higher refinery inputs led to the drawdown. Although both drivers became more …
25th 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
The recent tightening of export restrictions has been limiting the supply of staple agricultural commodities available to global markets and pushing up prices. In light of the ban on wheat exports from India, we’ve raised our forecast for the price of …
23rd May 2022
The prices of many industrial metals (IM) picked up this week on news of an easing of COVID-19 restrictions in China . However, we think weak demand and improved supply in China will send IM prices lower in the coming months, even if high energy prices …
20th 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 …
High product prices to suppress demand this summer Commercial crude oil stocks fell last week due to exports rising faster than imports and refineries stepping up operations. But high petroleum product prices should hold back demand in the coming months, …
18th May 2022
After a post-pandemic rebound in 2021, we expect growth in global demand for natural rubber (NR) to slow this year in tandem with a downturn in industrial activity, notably in the NR-intensive auto sector. That said, the market will remain in a deficit …
Most commodity prices fell this week amid a general sell-off in risky assets and a stronger US dollar . That said, we think the days of higher energy prices leading to an all-encompassing rally in commodity prices could be over. Natural gas prices rose on …
13th 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 …
OPEC production still falling short of target OPEC lowered its forecast for Russia’s oil production this year, but still expects it to rise. By contrast, we think Russia’s output will fall and see rising pressure on OPEC to step up output in response . …
We expect US fuel prices to remain historically high this year due to supply constraints. As a result, we suspect that oil consumption in the US will remain seasonably low for much of the rest of the year. US implied product demand has fallen from a …
12th May 2022
Unless prices fall, US demand is likely to remain soft Commercial crude stocks will be boosted in the coming weeks by the ongoing release of strategic reserves, regardless of what is happening with domestic oil demand. That said, there are now clear signs …
11th May 2022
News of force majeure on one of the pipelines in Ukraine bringing Russian natural gas to Europe just adds to our conviction that Europe is going to struggle to meet its gas needs over the next year. The heightened competition for gas imports suggests that …
Energy commodity imports held up relatively well in April given the widespread COVID-19 restrictions. But the trade data throw up some question marks about demand for industrial metals given the downturn in export volumes and somewhat lower metals imports …
9th May 2022
Energy prices continue to be pummelled by upward pressure related to fears of supply shortages and downward pressure from signs of slower economic growth, tighter monetary policy and a stronger US dollar . This week was no exception, although supply fears …
6th 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 …
We expect Indonesia’s latest ban on palm oil exports to be short-lived, but constrained supply and the high prices of other edible oils, coupled with elevated oil prices, will support the price of palm oil. We’ve revised up our palm oil price forecast to …
5th May 2022
High petroleum product prices to constrain US oil demand Commercial crude oil stocks rose last week on higher imports, lower exports and less crude oil being used by refineries. Implied product demand, meanwhile, was little changed and towards the lower …
4th May 2022
The EU proposal to end imports of Russian crude oil and petroleum products by the end of the year has long been in the works. If approved, we expect Russia’s oil exports to fall by around 20% this year, which in turn would keep oil prices over $100 per …
The global manufacturing PMI fell back in April. Admittedly, it was a sharp drop in China’s PMI that weighed on the global aggregate, but there are warning signs in the PMIs of most of the major advanced and emerging economies . While supply constraints …
3rd 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
Russia’s monopoly exporter of natural gas, Gazprom, suspended gas deliveries to Poland and Bulgaria this week because they refused to pay for Russian gas in rubles . There is some confusion about whether the process by which Russia demands rubles to be …
Russia’s decision to suspend gas deliveries to Poland and Bulgaria from today because of a payments dispute will only strengthen the EU’s resolve to end its dependency on Russian gas, keeping gas prices historically high for months to come. The move also …
27th April 2022
It has been an unusually quiet week for commodities, with less volatility than we have come to expect . The war in Ukraine continues to provide possible stresses for supply but, for now at least, it seems the market focus is shifting to demand as well, …
22nd 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 …
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
A cooling US housing market will weigh on lumber prices, despite disruption to imports from Canada. We expect the lumber price to continue its downward trend, but to remain well above its 10-year average . US lumber prices have been particularly volatile …
US commercial crude oil stocks look set to recover this year Commercial crude oil stocks fell last week on the back of a rise in exports and a decrease in imports. Going forward, though, the US government’s plan to further draw down its strategic oil …
20th 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 …
The war in Ukraine continued to dominate headlines, and commodity price movements, this week as peace talks fell apart and sent energy prices up sharply . However, at the same time, there are further worrying signs of a downturn in China’s commodities …
14th April 2022
Strong demand for LNG exports should lead to a higher average price of US natural gas this year. But we expect prices to ease back in the coming months as demand falls over the summer and output stays high . The price of US natural gas (Henry Hub) has …
SPR releases to boost commercial stocks significantly in months ahead Crude stocks in commercial storage shot up last week, as the US government made more sales from its strategic reserve and refineries curbed output in the wake of weaker demand. With …
13th 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 …
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
OPEC still dragging its heels OPEC oil production rose a little in March, but the group continues to underproduce. What’s more, its optimistic non-OPEC supply forecasts suggest that it has no intention of boosting output in the near term . The OPEC …
Last week, we suggested that the downside risks to prices were building, and these came to the fore in the past week with particularly hawkish US Fed minutes published on Wednesday and ongoing COVID-19 related lockdowns in China. The announcement of a …
8th April 2022
US commercial oil stocks unexpectedly rise, dragging prices down Commercial crude stocks rose last week, beating market expectations of a decline, due to rising domestic production and another sale from the Strategic Petroleum Reserve. If sustained, …
6th April 2022
Overview – Commodity prices remain extremely volatile owing to the uncertainty stemming from the ongoing war in Ukraine, and we doubt that they will find a clear direction anytime soon. However, assuming the war-related uncertainty begins to ease somewhat …
5th April 2022
Signs of weaker demand in China in the latest PMI data and the announcement that the US will sell off a large chunk of its strategic oil reserve suggest that the downside risks to commodity prices are building . Admittedly, while oil prices fell sharply …
1st 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 …
