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After rising (and falling) sharply at the start of the year, Asia LNG prices have started to push higher again recently. This latest rise seems to have been driven by a rebuilding of stocks, which should run its course over the coming months. That said, …
9th June 2021
Even after accounting for a fall in Brazilian production and a rise in global demand, we still expect the size of the global sugar market surplus to increase in 2021/22, which will weigh on prices . The price of raw cane sugar (sugar #11) has surged to …
8th June 2021
China’s imports of industrial commodities, particularly iron ore and unwrought copper, eased back in May. We expect import volumes of both these commodities to fall further in the coming months as policy support continues to be gradually withdrawn . …
7th June 2021
In what proved to be one of the shortest OPEC+ meetings ever, the group agreed this week to stick to its previously planned increase in output in July . Oil prices rose sharply on the back of the announcement, with Brent now trading above $70 per barrel. …
4th June 2021
Ongoing decline in stocks to help lift oil prices a little higher US commercial crude stocks declined for the fifth week in a row, owing to the robust economic recovery and a further increase in inputs to refineries. With demand set to rise further, and …
3rd June 2021
Overview – May was a strong month for the prices of most metals, but we suspect that this may be as good as it gets. After all, if we’re right in expecting economic growth in China to slow in the second half of this year, the prices of most industrial …
Overview – Cold weather in parts of the northern hemisphere helped push up the prices of coal and natural gas last month, while oil prices also rose. We still think that average energy prices will be higher this year than last but expect the prices of …
2nd June 2021
Overview – Prices generally rose in May, bolstered by signs of recovery in the global economy – led by the US – and stronger commodities demand. While prices could make further gains in the near term, we expect the prices of most commodities to be in …
The key takeaways from China’s May survey data are that while demand remains robust, supply shortages are leading to inventory drawdowns and price inflation. The data are broadly positive for commodity demand, but we think the withdrawal of fiscal …
1st June 2021
OPEC+ is set to meet next Tuesday, when we expect the group to agree to continue with its incremental increases in production through to July . We think it unlikely that the group will address the thornier issue of the ongoing rise in Iran’s production …
28th May 2021
We think that the prices of wheat, corn and soybeans will decline over the next six months owing to a rebound in global supply and slower demand growth in China . The prices of wheat, corn and soybeans all soared to multi-year highs earlier this year …
27th May 2021
Limited domestic supply, expensive imports and strong growth in demand have fuelled the rally in US steel prices. But with supply set to improve, at a time of softer growth in demand, prices should fall . Steel prices have soared globally since their …
26th May 2021
Stars aligning for higher oil prices Last week’s decline in US crude stocks adds to evidence that the oil market is getting tighter. This supports our view that oil prices have further to rise in the months ahead, before higher OPEC+ supply brings the …
In the short-run, China has no choice but to grit its teeth and keep buying Australian iron ore, even as bilateral ties continue to fray . But this dependence will diminish over time thanks to increased supply from other sources, greater use of recycled …
While China’s announcement that it will crack down on speculation and market irregularities has taken some of the froth out of the iron ore market in recent weeks, we think the price of iron ore will ultimately be driven even lower by less favourable …
The price of Pacific coal has surged to just over $100 per tonne for the first time since 2019. We think that the price will remain elevated for the rest of this year in large part owing to strong demand . Despite China’s unofficial ‘ban’ on coal imports …
25th May 2021
The prices of most commodities dropped back again this week as global equity markets struggled to make ground and virus cases in parts of Asia continued to rise. Meanwhile, reports emerged that good progress had been made in negotiating a new nuclear deal …
21st May 2021
The recent disruption to global auto production stemming from ongoing semiconductor microchip shortages poses a downside risk to our price forecasts for platinum and palladium. In this Update , we map out the potential impact on demand for the metals from …
Global production rising, despite lockdowns Global steel production rose again in April as lower output in India, in particular, was offset by sizeable jumps in production in China, Russia and Brazil. For now, virus-containment measures remain a key …
High prices to incentivise production growth Average daily global aluminium production was unchanged in April, but we continue to expect that output will increase this year given current high prices and premiums . According to the International Aluminium …
20th May 2021
The recent depreciation in the US dollar has helped to boost commodity prices. But while we expect a stronger dollar to weigh on most commodity prices later this year, we think that oil prices will still rise . The majority of commodity benchmarks are …
Curtailment of refinery activity to boost crude stocks next week US commercial crude stocks increased last week as inventories continue to be drawn down from the US government’s strategic reserves. We expect commercial crude stocks to rise further next …
19th May 2021
A revival of the nuclear deal with Iran would pave the way for sanctions to be lifted, boosting the country’s oil production and weighing on prices. By contrast, while we still expect Iranian output to increase if a deal isn’t agreed, we think this would …
17th May 2021
Biden’s infrastructure package is ambitious, but we doubt it will pass in its current form If it did pass, the impact on energy markets could be large But we doubt it would be too significant for industrial metals markets In this Commodities Watch , we …
14th May 2021
Aside from coal and natural gas, the prices of most commodities fell this week in tandem with the declines in global equity markets . Investors are concerned about rising inflation, particularly in the US, and have seemingly reduced their exposure to …
There are three overarching themes present in the agriculture document associated with China’s 14th Five-Year Plan – improving food security, continuing with the modernisation of the rural economy and higher environmental standards . In this Update we …
13th May 2021
Pipeline shutdown may push crude stocks back up US commercial crude stocks held fairly steady last week despite a collapse in exports. While both exports and product demand will probably increase over the coming weeks, crude stocks may have actually risen …
12th May 2021
Compliance could start to slip later this year OPEC’s overall production was largely unchanged in April, as most producers remained disciplined. However, compliance could slip later in the year if we are right and there is a surge in demand . The OPEC …
11th May 2021
Commodity prices pushed higher yet again this week . Most notably, the seemingly unassailable climb in industrial metals prices saw the price of copper push above $10,000 per tonne for the first time since 2011. However, it is still difficult to square …
7th May 2021
China’s commodity imports fell back in April compared with a month earlier. This chimes with our view that imports of industrial commodities into China will come off the boil as economic growth there slows. In turn, this should be a factor dragging the …
Crude oil export surge unlikely to last for long US crude stocks plummeted last week primarily because net imports nosedived to a record low. While net imports will probably recover in the coming weeks as exports ease back, we think that crude stocks will …
5th May 2021
We think that the absence of pipeline capacity constraints, a strong recovery in US oil demand, and increased output from OPEC+ members will all help to ensure that the Brent-WTI price spread remains narrow over at least the next year or so . Aside from …
Overview – The rebound in global economic activity this year will lead to a strong pick-up in demand for energy commodities. Arguably, this has already happened in the gas and coal markets as industrial activity has revived in both China and some …
4th May 2021
It was another good week for commodity prices, with the exception of precious metals . Somewhat better-than-expected Q1 GDP and survey data, particularly in the euro-zone, was one factor fuelling expectations of stronger demand. The pick-up in vaccination …
30th April 2021
Recent data have highlighted the strength of the rebound in physical demand for gold, especially in India and China. But we don’t think this poses much of a risk to our forecast for the gold price to fall this year . According to the World Gold Council’s …
While commodities and US equities often move in the same direction, this is not always the case. We expect poor returns from commodities over the next few years, but reasonable returns from US equities. The correlation between the annual returns from the …
29th April 2021
Overview – Although we anticipate a strong global economic recovery in 2021, our forecast of a slowdown in China’s economy means that we still expect industrial metals prices to end the year lower. At the same time, a stronger US dollar and rising US …
28th April 2021
Decline in stocks should resume before long US crude commercial stocks stabilised last week, but we think they will resume their decline before long as product demand benefits from the easing of virus-related restrictions. The EIA’s weekly US Petroleum …
Download the PDF for the full report. Overview – Following a spectacular rebound from pandemic-induced lows, we continue to expect that most commodity prices will be falling again by end-2021. Although growth in demand should be strong as the global …
27th April 2021
Most commodity prices increased this week, with the prices of agricultural commodities rising particularly strongly . The prices of corn, soybeans and wheat surged, reaching new multi-year highs on the back of adverse weather in the US and Brazil. In …
23rd April 2021
Nearing the peak in China’s production Global steel production continued to rise in March, no doubt incentivised by high prices. Growth in demand in some key markets, such as the US and China, has been strong, but we suspect that production in China will …
22nd April 2021
Gasoline demand to continue to rise US crude commercial stocks rose a touch last week, but we expect them to fall in the coming weeks as product demand picks up in tandem with the progressive easing of lockdowns . The EIA’s weekly US Petroleum Report, …
21st April 2021
Even though we expect lumber demand to hold up well for some time, we still think that a rebound in supply will lead to a sharp fall in the price of US lumber over the next eighteen months . The price of US lumber (CME random lengths) has skyrocketed from …
20th April 2021
Global aluminium production likely to push higher before long Daily aluminium production dropped back a bit in March. But with prices currently at multi-year highs, and only very piecemeal restrictions on output in China, we doubt it will be long before …
Most commodity prices rose this week following a batch of positive economic data releases . Oil prices were up particularly strongly on the back of a larger-than-expected weekly decline in US crude stocks and an upward revision to the International Energy …
16th April 2021
The latest China trade data show that ore imports are rebounding, though scrap imports remain subdued. Meanwhile, imports of refined copper have seen a renewed surge. Nevertheless, we continue to expect China’s imports of ore and scrap to rise while …
15th April 2021
The ongoing revival in global demand growth together with constrained global supply means that the price of corn is likely to hold onto most of its recent gains for some time. That said, we think that the corn price will fall in 2022 as demand growth in …
US oil demand on the road to recovery Last week’s fall in crude stocks in the US was the result of higher demand rather than lower supply. This bodes well for our view that a relatively strong economic recovery in the US will boost oil demand there, …
14th April 2021
OPEC oil production to increase in earnest from May OPEC oil production rose a touch in March. We expect that the group’s production will hold steady throughout April, as existing quotas remain in place, but that it will increase thereafter as quotas are …
13th April 2021
China’s imports of key industrial commodities point to ongoing strength in domestic demand. But the bigger picture is that import volumes remain well below last year’s peaks, and we expect growth in China’s commodity demand to slow further this year as …
