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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
The latest data show that OPEC has more than met its production quota, albeit mostly down to Saudi Arabia. However, with non-OPEC oil supply increasing and demand growth waning, we still think that the price of Brent oil will drop to $50 per barrel by …
US crude stocks fell sharply and we expect them to continue to fall in the coming weeks as refineries come out of maintenance. However, higher refinery activity should also start to stabilise gasoline stocks. … US Weekly Petroleum Status …
13th March 2019
There have been some dramatic moves in price spreads between different grades of crude oil in the last year. For the most part, spreads have reflected differences in the underlying physical demand and supply of a particular crude. In this Energy Watch , …
In stark contrast to recent years, investors have been drawn to platinum so far in 2019. As a result, ETF holdings have risen by more than a sixth in just two months and are rapidly approaching the all-time high set in 2015. This Metals Watch will explore …
12th March 2019
Elevated levels of global end-stocks have prompted us to review our price forecasts. We have downgraded our end-2019 corn price forecast but left the price outlook for wheat and soybean unchanged for now. … High global stocks to weigh on wheat and corn …
After a relatively quiet week, the prices of most commodities took a tumble on Friday afternoon following the release of weak US February employment data. A rise of just 20,000 in non-farm payrolls, combined with poor Chinese February trade data and a …
8th March 2019
China’s imports and exports dropped sharply in February. Admittedly, some of the plunge can be explained by the shift in timing of the Lunar New Year holiday, but we expect trade to remain weak in the coming months as global demand cools and domestic …
Theoretically, there should be a relationship between the price of oil, the number of oil rigs actively drilling and oil production. However, the relationship appears to have broken down in the past. In this Energy Watch , we investigate the possible …
7th March 2019
Industrial metals prices have risen robustly this year, but we think that the rally is running out of steam. Even if a US - China trade agreement is reached, a slowdown in global growth and an accompanying rise in risk aversion will send industrial metals …
US crude stocks jumped, largely owing to an increase in net imports. In contrast, product stocks fell, which is partly a seasonal phenomenon but does suggest that US consumer demand is holding up well. … US Weekly Petroleum Status …
6th March 2019
The price of oil continued to climb in February as the US and China inched towards a trade deal, and Saudi Arabia announced that it would cut output further. However, we still think that prices will fall by end-2019 owing to soft demand arising from a …
Increasing signs of a US-China trade deal prompted a return of risk appetite and led to the prices of many industrial metals hitting multi-month highs and a sell-off in gold and silver. However, even if a trade agreement is reached, we expect global …
There has been a surprisingly muted reaction in commodity markets to the latest reports that China and the US are close to a trade deal. We think this reflects a combination of the fact that much of the good news has already been priced in, as well as …
5th March 2019
Next week, commodity markets will be closely watching the annual meeting of China’s parliament, the National People’s Congress, hoping for additional fiscal stimulus. The government’s Work Report and Budget will be presented on the first day. Meanwhile, …
1st March 2019
Despite having risen by over a tenth in the past six months, we believe that the upswing in the gold price has further to run. Our forecast of falling equity prices this year suggests strong demand for safe havens, including gold. We have revised up our …
The latest pick-up in the unofficial PMI data does not change our expectation of a slowdown in China’s economy, which underpins our forecast of mostly weaker commodity prices, especially industrial metals. … Improvement in China’s PMI unlikely to …
Oil and industrial commodity prices rose in February on hopes of a US-China trade deal. However, even if there is a deal, we forecast that prices will fall back owing to lower demand as global economic growth slows. … Boost from trade talks to prove …
28th February 2019
The plunge in the spot LNG price is in large part the result of a mild northern hemisphere winter. As such, prices may rebound if the weather normalises, but rapid growth in supply will prevent sizeable gains. … LNG price slump is not all about the …
Since the start of 2019, commodity indices have increased at the same time as a host of asset classes, including US and emerging market equities. This Commodities Watch will explore whether this rising tide is set to continue or whether it hits the rocks. …
27th February 2019
US crude inventories recorded a significant draw, which was impressive considering US production continued to tick up and is now at a record-high. … US Weekly Petroleum Status …
Today’s data show global steel output stuttered out of the starting blocks at the beginning of 2019 and we expect output growth to remain lacklustre this year. … Global Steel Production …
26th February 2019
January trade data showed that China’s gold imports surged but India’s imports were down on the month. We expect imports from both countries to decline in the months ahead as higher prices deter buying. … China and India Gold Imports …
The prices of many major commodities, including oil, gold and copper, hit multi-month highs this week, but we think that almost all will fall sooner rather than later. The rally this week was fuelled by signs that the US and China are inching towards a …
22nd February 2019
The US has now cemented its position as the largest oil producer in the world. Unsurprisingly, inventories rose, despite record-high exports, denting hopes of a further oil price rally. … US Weekly Petroleum Status …
21st February 2019
There has been much commentary in recent months on the balance of power in relations between the US and Saudi Arabia. Many of the areas of mutual interest are geopolitical in nature and we are not political analysts. But we think that we can make several …
Global production growth plummeted in January, but given that input costs are falling, we think that output growth will recover later this year. … Global Aluminium Production …
20th February 2019
The recent surge in the oil price reflects concerns about a supply shortfall, on the back of sharply lower production in some key OPEC producers. That said, there are already signs that growth in demand will be weaker this year, which will remove much of …
We have revised up our iron ore price forecast following the disaster at the Córrego do Feijão iron ore mine and its aftermath, given the negative implications for supply. However, with demand set to be lacklustre, we still think that iron ore prices will …
Slower economic growth in the two largest oil consumers will weigh on oil demand this year and is a key reason why we expect prices to fall, despite lower supply. Admittedly, China is likely to continue buying for its strategic reserve, but this will not …
19th February 2019
Exchange stocks in most base metals have slumped over the past year. Typically, this is associated with strong demand or weak supply growth, and results in higher metals prices. In this Metals Watch , we explain why we believe that this won’t be the case …
The price of palladium has reached another record high today, but we remain of the view that this elevated level is unlikely to last. In fact, it is now clear that supply rose strongly in 2018 which, coupled with the current slowdown in car sales, should …
15th February 2019
After rising strongly this week, the price of oil is likely to remain supported in the short term by clear signs of lower supply from OPEC (mainly Saudi Arabia) and the loss of Iranian and Venezuelan barrels. However, we think that slower growth in demand …
Constrained supply growth and surging demand from electric vehicles mean that we think that the price of copper will rise by over 60%, to nearly $10,000 per tonne, by 2025. This is likely to represent a high watermark for prices. Our long-term forecast …
14th February 2019
China’s major commodity exports rose in January, probably due to a combination of an earlier Chinese New Year holiday and sluggish domestic demand. Imports also painted a surprisingly resilient picture, but we don’t think that this will persist as the …
US crude stocks recorded a hefty build, primarily reflecting a decline in refinery inputs as net imports plunged and production remained unchanged. … US Weekly Petroleum Status …
13th February 2019
January production data showed that OPEC is more than complying with the output cuts announced in late 2018, which probably explains the relative resilience of oil prices in recent weeks. However, we think that weaker global oil demand will lead to excess …
12th February 2019
Oversupply has been a major headwind for many agricultural commodity prices in recent years. But we think that, in many cases, stocks will start to be drawn down in 2019, which should give a lift to prices. Admittedly, our forecast of slower global …
11th February 2019
The return of Chinese investors could lead to a sharp rise in the price of iron ore next week, given the likelihood of significantly lower Brazilian supply. However, the prices of other industrial metals may fall on Thursday if, as we expect, China’s …
8th February 2019
