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A drop in refining activity and a further increase in net imports saw a third consecutive weekly build in crude stocks, which are now at the highest since September 2017. An unexpected drawdown in the Strategic Petroleum Reserve (SPR) points to possible …
1st May 2019
US natural gas stocks have remained stubbornly low in recent years. We think that this reflects a new norm in the natural gas market which is eroding the impact of stock levels on prices. … Why lower US natural gas stocks are here to …
The April survey data suggest China’s economy has entered a softer patch and underpin our view that most industrial and oil prices will ease back in the coming months. … China’s PMIs point to subdued commodities …
30th April 2019
Our forecast that global economic growth will stay lower for longer suggests that the recent revival in industrial metals prices will prove short-lived. However, the prices of gold and silver could benefit from the weak macro-economic backdrop. That said, …
The strength of global steel production in the first quarter looks unsustainable given that we think global economic activity will remain subdued. What’s more, high iron ore prices are undermining profitability. … Global Steel Production …
29th April 2019
A stabilisation of economic growth in China should support the price of Pacific coal in 2019, but in the longer term we expect prices to slide as demand softens and supply increases. … Hard to be positive on Pacific …
While the latest trade data suggest that Indian demand for gold strengthened further in March, China’s imports remained in the doldrums. Despite the fact that both countries’ imports were probably boosted by some one-off factors in April, we expect …
The prices of commodities mostly fell this week, despite Friday’s data showing stronger-than-expected Q1 growth in the US. Even oil prices ended this week lower. Having initially jumped when the US government announced its decision to remove waivers from …
26th April 2019
We have long expected that sluggish global demand will weigh on commodity prices in 2019. That said, recent indicators have led some to suggest that global growth may be bottoming out. But we disagree, and maintain that prolonged economic weakness will …
Our forecast of sluggish global growth, further increases in US output and a rise in investor risk aversion suggests that the recent rally in oil prices will prove short-lived. In contrast, we think that demand for natural gas and LNG will defy the …
The price of lead has been lower on the LME than on the Shanghai exchange for more than a year now and it has fallen this year while the prices of other metals, most notably its sister metal zinc, have risen. However, we think both of these divergences …
25th April 2019
A surge in net imports and the recovery in domestic production led crude stocks higher last week. However, we expect stocks to start to be drawn down in the coming weeks as the refinery maintenance comes to an end. … US Weekly Petroleum Status …
24th April 2019
We retain our long-held view that the price of oil will fall this year owing to weak global growth, further gains in US oil output and a rise in investor risk aversion. However, the scale of recent supply disruption has been greater than we anticipated. …
23rd April 2019
Power problems and weak prices have held back aluminium output so far this year. But we think that rising capacity and lower raw material costs will cause production to rise in the coming months. … Global Aluminium Production …
The stronger-than-expected economic activity data released this week by China failed to boost commodity markets. Part of the reason is probably that some of the good news had already been priced in. And in some cases, market-specific headwinds have …
18th April 2019
The collapse in US net imports drove crude oil stocks lower last week. We expect further slides in crude stocks as the maintenance season for refineries ends. … US Weekly Petroleum Status …
17th April 2019
We think that the prices of most commodities will fall this year as global economic growth remains weak and investor risk aversion returns. While policy in China has become more accommodative, it is on a limited scale and is only likely to stabilise …
Copper prices have approached 10-month highs recently on supply woes and optimism that growth in China will rebound, but we think that this rally will reverse as China’s recovery falls short of expectations. … Copper rally: too far, too …
15th April 2019
It has been a relatively quiet week in most commodity markets, except for energy. Oil prices rose again, to over $70 per barrel for Brent, on news of military operations in Libya. However, we think at this stage much of the bad news on supply is now …
12th April 2019
China’s commodity imports were generally weak in the first quarter of 2019, mirroring the slowdown in the wider economy. In contrast, commodity exports surged. We suspect that imports will remain subdued in the coming months, at least until recent policy …
The decline in net imports was one reason why US crude stocks surged again this week. However, we don’t think that this trend will continue as we expect the maintenance season for refineries to end soon. … US Weekly Petroleum Status …
10th April 2019
As a group, OPEC is more than complying with its production quota, which helps to explain the recent rally in prices. That said, individual country compliance is quite poor with Saudi Arabia shouldering the brunt of the cuts. At the same time, the group …
Most of the excess supply in the oil market has now disappeared as a result of the voluntary and involuntary output cuts, notably by OPEC member states. However, we expect higher prices to encourage an upturn in supply later in the year, at a time of only …
9th April 2019
We expect the Chinese price of steel rebar to drop by more than a fifth this year as a cooling property sector dents demand. … Chinese steel prices could drop …
All the signs are that US-China trade talks are progressing well. On Friday, there were even media reports that the two sides had agreed timelines for implementing a deal. Given the good news on trade, some more upbeat economic data and the apparent …
5th April 2019
A tropical cyclone and a burst dam will mean lower iron ore output from the three largest producers this year, which we believe will swing the market into a deficit. In our view, this deficit will prove temporary and prices will drop with recovering …
The recent plunge in the spot price of Asia liquefied natural gas (LNG) in part reflects warmer-than average winter temperatures, but there is a more structural problem in the form of excess supply. We think this will mean that the average annual LNG …
Jumps in net imports and US production meant that US crude stocks showed a stellar build this week. However, we expect that stocks will fall in the months ahead as refineries come back online. … US Weekly Petroleum Status …
3rd April 2019
Back in 2014, we examined explanations for the unusually high correlation seen between commodity and equity price moves during 2009-12. We concluded that while ultra-loose policy played a role, the correlation was also attributable to the increased …
The prices of industrial metals generally held on to year-to-date gains in March, due to supply fears coupled with investor optimism around a successful resolution to US-China trade talks. Even if a trade deal is reached, we expect that growth will stay …
Oil prices saw their strongest quarterly gain in almost ten years in Q1 2019. However, we expect that this recent upturn will begin to subside and that the fundamentals of elevated US supply and subdued global demand should send prices lower by end-2019. …
2nd April 2019
The prices of most commodities struggled to find direction in March, although oil made some further gains. If a US-China trade deal is signed in April, prices may revive but we suspect that any rally will prove short-lived and that prices will fall back …
1st April 2019
The strength of the latest China survey data may signal that growth there has passed its low-point. But we think there are still reasons to be cautious, with negative implications for most commodity prices. … Still grounds for caution, despite stronger …
After a strong first quarter, we expect the prices of most commodities to ease back over the course of 2019 on the back of subdued growth in demand. There are now broad-based signs of slower growth in most major economies, including the US, the euro-zone, …
29th March 2019
We estimate that strategic petroleum reserves (SPRs) in India and China are at record highs and will continue to increase in the years ahead. In contrast, we think that US reserves will slide gradually in the coming years, and as a result, the net impact …
The spike in oil prices in 2018 followed a similar pattern to the spike in 2012. As such, the price trend in 2012-13 can perhaps tell us something about the likely direction of prices this year. To be clear, our forecast of lower oil prices by end-2019 is …
28th March 2019
US crude stocks rose this week as the refinery rate ticked down and net imports picked up. We don’t think that this trend will continue as we believe that OPEC exports to the US will continue to fall. … US Weekly Petroleum Status …
27th March 2019
While dwindling exchange stocks have helped to boost the price of zinc in recent months, we think that prices are set to drop appreciably later this year as increased mine output finally starts to feed through into significantly higher refined output. … …
Today’s data show that rising Chinese output led to robust global production growth in February, but we think weak demand and high iron ore prices mean that steel mills will cut output sooner rather than later. … Global Steel Production …
26th March 2019
Even looking through the Lunar New Year distortions to China’s imports, the latest trade data still point to very weak gold demand from India and China in February. While China and India’s imports are unlikely to continue at such a low level, we do expect …
In a week when fears about global economic growth were stoked by a dovish Fed and weak euro-zone flash PMI readings for March, commodity prices actually performed rather well. However, we think that energy and industrial commodities will struggle to hold …
22nd March 2019
The guiding principle behind OPEC’s recent production cuts is to reduce global oil stocks and to put prices on a firmer footing. In the near term, stocks may decline given that OPEC is now producing considerably less than its quota. But our forecast of …
China’s economic rise over the past 30 years involved massive increases in commodity consumption and the country now plays a significant role in determining prices. However, the impact on global agricultural markets has been more nuanced, not least …
21st March 2019
US stocks slumped again. The drivers were an increase in the refinery rate and a huge jump in exports. What’s more, this occurred despite production rising. We expect that as refineries come out of maintenance and as OPEC exports drop, crude stocks will …
20th March 2019
Global aluminium production has stuttered so far in 2019, but we think that this will merely be a lull, as new capacity comes on stream and pollution controls end in China. … Global Aluminium Production …
Despite weaker industrial demand, we expect silver prices to rally by more than 10% this year as safe-haven demand returns and mine production falters. … Silver prices likely to …
19th March 2019
The recent upturn in most commodity prices appears at odds with the negative trend in global manufacturing. Of course, supply factors could explain the divergence, and probably do in the case of oil. However, we think supply fears could prove unfounded if …
The prices of many commodities rose this week, despite soft economic data, in part owing to confirmation of Chinese policy stimulus at the National People’s Congress. As it happens, we think the scale of Chinese policy easing will only be sufficient to …
15th March 2019
This week Fiat Chrysler Automobiles (FCA) announced a recall of almost 1 million vehicles. But even this should be insufficient to prevent palladium or rhodium prices from dropping markedly from current elevated levels. … Emissions drama returns to the …
Nickel prices have surged since the start of this year, but we think that this leaves the metal particularly vulnerable to the global economic slowdown and higher output. … Nickel set to lose its star performer …
14th March 2019
