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Production should bounce back US commercial crude stocks declined as Hurricane Delta dealt a further blow to output. And though production should revive to pre-hurricane levels, gains will probably be smaller in the months thereafter . The EIA’s weekly US …
21st October 2020
China’s aluminium output set to climb even higher Growth in global aluminium production accelerated in September, led by robust output gains in China and Canada. Capacity additions in China should mean that global output continues to rise in the fourth …
20th October 2020
After a rollercoaster few weeks, it was a more muted affair for commodity markets this week . Indeed, there was little in the way of big price moves, which we think reflects a couple of factors. First, in many cases, it remains difficult to identify a …
16th October 2020
Hurricane-induced slump in production to prove short lived The suspension of production in the Gulf of Mexico ahead of Hurricane Delta largely explains the decline in US crude stocks last week. But most of this production has already been restarted and …
15th October 2020
OPEC production to remain low, even as Libya comes back on stream OPEC’s oil production fell in September and, except for Libya, we expect output by individual member states to either stabilise or decline a touch in the coming months as prices remain weak …
13th October 2020
The ongoing fiscal-led boost to domestic demand and a stronger renminbi propelled China’s commodity imports higher last month. This tallies with our long-held view that a rapid rebound in the Chinese economy will support generally higher industrial metals …
The prices of most commodities rose this week, supported by a pick-up in risk appetite towards risky assets, such as US equities . Oil prices were the top performer, increasing by around 10% in part due to supply concerns. Nevertheless, we expect oil …
9th October 2020
In this Focus , we argue that the medium-term impact of the COVID-19 pandemic on both global economic growth and consumer behaviour has brought forward “peak oil demand” to around 2030 . As a result, we expect that real oil prices will be falling for much …
8th October 2020
Hurricane Delta to weigh on stocks next week US commercial crude stocks rose a little as net imports jumped in combination with a revival in domestic production. But with another hurricane on the way, we expect output to dip back next week . The EIA’s …
7th October 2020
Overview – Some energy commodities such as natural gas and coal benefitted from a seasonal uplift in demand in September, but oil prices fell. We think that oil and natural gas prices will make a little more ground this year, provided that demand …
6th October 2020
Overview – Industrial metals prices fell in September on the back of the appreciation in the US dollar and fears that the re-tightening of virus containment measures in Europe and elsewhere will dampen demand growth. However, we think that …
5th October 2020
The prices of most major industrial commodities, including oil, fell this week seemingly owing to lingering fears about commodity demand . Concerns are growing about the financial health of some major property developers in China and COVID-19 related …
2nd October 2020
Overview – An uptick in COVID-19 cases in India and in developed economies knocked back many commodity prices in September, with few left in positive territory for the month. And although September’s price action reminds us that downside risks to …
1st October 2020
Recovery in refinery throughput to weigh on stocks in the coming months US commercial crude stocks fell a touch as exports rose. And despite implied product demand dropping back, a revival in refinery activity is likely to act as a drag on crude stocks in …
30th September 2020
We expect the aluminium market in the decade ahead to be characterised by stubbornly low prices, as economic growth in top consumer China eventually slows and begins to drag on demand. But as consumption in other emerging markets increases and the …
China’s September PMI readings suggest that the economy is now entering a period of above-trend growth, which is indisputably good news for the prices of commodities, particularly industrial metals . The official manufacturing PMI jumped to 51.5 – a …
A higher gold price, along with the ongoing recovery in industrial demand, particularly from China, means that the price of silver is likely to rise in the year ahead . The silver price has fallen sharply in recent weeks, from a peak of around $29 per …
Although WTI crude oil prices have partially rebounded from their second-quarter nadir, oil production in the US has yet to recover. We suspect that low prices and producers struggling to source financing will mean that US oil output won’t recover to …
29th September 2020
China is ramping up its purchases of US energy and agricultural products as promised in the Phase One trade deal. But instead of reflecting a desire to meet its obligations to the US, we think China’s buying mostly reflects opportunistic purchases at low …
28th September 2020
It was another wobbly week in commodity markets as prices generally fell, largely on the back of a deterioration in investor risk appetite . Most equity markets sold off and the US dollar strengthened as a tightening in virus containment measures in …
25th September 2020
Although a vaccine against COVID-19 may not dramatically alter the near-term economic outlook, we expect it would structurally improve the demand prospects for many commodities and therefore boost prices, particularly for crude oil . As a ‘second wave’ of …
24th September 2020
Headwinds rising for global steel production Global steel production continued to recover in August. However, new regulatory measures affecting the property market in China – along with the re-introduction of virus-related restrictions elsewhere – could …
Despite the recent falls in the prices of precious metals, we still expect the gold price to edge higher over the coming year as US real yields drift a little lower . The gold price surged from March to early August owing to the plunge in US real yields, …
23rd September 2020
It’s a bumpy road, but demand is recovering US commercial crude stocks dipped as net imports eased back and production edged lower. Product stocks also fell, in part due to lower refinery activity but also as a result of a tick-up in implied demand . …
The rapid bounce-back in construction and industrial activity in China, reflected in our revamped China Activity Proxy, looks set to continue in the coming months as additional fiscal support is introduced. This underpins our forecast that most industrial …
22nd September 2020
China to continue to prop up global supply Global aluminium output remained strong in August. Production should rise in the coming months as new capacity comes on stream in China, which should act as a lid on prices . According to the International …
21st September 2020
Oil prices surged by around 10% this week on the back of not very much . Admittedly, OPEC declared that it would clamp down on non-compliant members and re-iterated that it would do what it takes to support prices. And US crude stocks fell in the latest …
18th September 2020
Strong demand from China will put a floor under corn and soybean consumption in 2020/21. But with record expected yields in the US, we expect corn and soybean prices to come off the boil . In the September World Agricultural Supply and Demand Estimates …
Persistently weak demand could force an extension of OPEC production cuts OPEC’s oil production rose sharply in August on the back of higher output quotas. However, if concerns persist about global oil demand, which was discussed at length at yesterday’s …
Hurricanes continue to distort the US crude demand picture The restart of refineries following Hurricane Laura explains last week’s fall in crude stocks. With another hurricane on its way, it will be some time before a clear picture emerges of the state …
16th September 2020
The price of US steel has surged recently, and we think that the price will continue to rise in the year ahead as demand picks up at a time of constrained supply . After hovering at around $475 per tonne during April-August, the price of US steel (HRC) …
15th September 2020
Concerns about demand and a move away from ‘risky’ assets, including equities, dragged both energy and industrial metal commodity prices lower this week . In the oil market, we think that any further recovery in oil consumption will be constrained this …
11th September 2020
A combination of strong demand from China and a slow recovery in global production from its virus-related trough means that the price of iron ore is likely to remain elevated for the remainder of this year. However, we expect prices to fall in 2021 as …
Gasoline demand to face downward pressure in the weeks ahead US crude stocks snapped a six-week falling streak to increase last week as refinery activity fell. And as seasonal factors weigh, we expect gasoline demand to make little further headway this …
10th September 2020
Most industrial metals prices are now above their pre-virus levels, after rallying from their March lows. We reckon that the price rebound has further to go, as China’s impressive economic revival continues, and the backdrop for risky assets continues to …
Brent’s recent price drop to a two-month low shows the fragile nature of its price recovery. We think that an uneven recovery in demand, combined with the hangover of vast oil stocks accumulated in the first half of this year, will limit any price gains, …
8th September 2020
China’s commodity import volumes remained high in August, reflecting the broader recovery in economic activity. We expect commodity demand to remain strong in the coming months but import volumes may ease back given the recent rise in prices of many …
7th September 2020
Despite further signs of strength in China’s manufacturing sector, the prices of most industrial commodities – as well as gold and silver – fell this week owing in large part to an appreciation of the US dollar . However, the ongoing fiscal stimulus in …
4th September 2020
Overview – Industrial metals rallied strongly in August on the back of encouraging economic data out of China and some depreciation of the US dollar. By contrast, the price of gold eased back, after hitting an all-time high early in the month. However, …
Overview – Energy prices continued to recover in August, but they are still trailing other commodity asset classes as well as other risky assets, such as US equities. We expect that prices for the most part will hold steady for the rest of this year given …
3rd September 2020
Hurricane disruption to linger and weigh on crude stocks a little next week US crude stocks dropped sharply last week as US production collapsed by over 1m bpd. And though supply is bouncing back, we expect further drawdowns next week as output remains …
2nd September 2020
Overview – Ongoing fiscal stimulus in China, coupled with the recent depreciation of the US dollar, is boosting commodity prices. China’s commodity imports are also growing strongly, but we suspect that the pace of purchases may slow soon as higher prices …
China’s August PMI readings support our view that the economy will return to its pre-virus trend by the end of this year, which is positive for almost all commodities prices, but especially industrial metals . That said, metals prices have already had a …
1st September 2020
The Fed’s move to a “flexible form of average inflation targeting” announced at this week’s Jackson Hole is broadly positive for commodities prices. It points to ultra-loose US monetary policy for longer, which is likely to act as a drag on the value of …
28th August 2020
Global oil supply fell to a multi-year low in the second quarter, and recent data point to output having fallen further in the third quarter. With demand reviving, we think the oil market is now in a deficit, which – assuming there is no ‘second wave’ of …
Hurricane Laura to weigh heavily on crude stocks next week US crude stocks dropped again last week owing primarily to a collapse in net imports. Stocks should decline next week too since Hurricane Laura has forced most production in the Gulf of Mexico …
26th August 2020
A recovery in demand at a time of constrained supply will put downward pressure on US natural gas stocks and provide a small lift to prices in 2021 . The price of US natural gas (Henry Hub) touched a multi-decade low of $1.48 per mBtu in June owing …
25th August 2020
Imports to remain weak for some time yet Despite a bounce-back in India’s imports of gold last month, China’s imports remained in the doldrums. Gold imports by both countries should rise in the months ahead, but a full recovery still appears to be a long …
Boom in Chinese production to continue The contraction in global steel production continued to ease in July. This improvement remains led by a surge in Chinese production resulting from a state-sponsored rise in infrastructure spending, which is set to be …
24th August 2020
