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The latest trade data from India and China show that gold imports slumped in December. We expect the decline in imports to continue in India, for January at least, as prices are higher in local currency terms in this price-sensitive market. However, in …
29th January 2019
In light of a tragic accident in Brumadinho, we are revising up our iron ore price forecasts for this year and next in anticipation of weaker-than-expected Brazilian output. However, we are still of the view that the market will be well supplied and have …
28th January 2019
Global demand growth is set to slow to its weakest pace since the global financial crisis, causing investor sentiment towards industrial metals to deteriorate. Both of these factors should drag industrial metals prices lower this year. In stark contrast, …
Commodity prices largely shrugged off comments this week by the US Commerce Secretary that the US and China were “miles and miles” away from a trade deal. But the outlook for trade talks may take centre-stage next week as the Chinese Vice-Premier Liu He …
25th January 2019
Today’s data suggest that rapid increases in global steel output in 2018 are not set to be repeated in 2019. We think demand weakness will be a drag on prices and production this year. … Global Steel Production …
The received wisdom in the oil market is that the latest political turmoil in Venezuela is positive for oil prices as it could lead to further disruptions to the country’s oil supply. But a change of regime could actually prompt a relatively rapid rebound …
US crude stocks jumped, after falling for the past two weeks, despite no change in production. That said, the large jump in production may not be repeated this year given low prevailing prices. … US Weekly Petroleum Status …
24th January 2019
Our forecast of slower global economic growth in 2019 poses a major headwind for commodity prices this year. What’s more, we are expecting further falls in global equity prices, which suggests that investor sentiment towards riskier assets more generally, …
European smelter closures and a further reduction in output at the Bécancour smelter in Canada saw global production growth plummet m/m in December. However, with cost pressures easing and smelters ramping up, this will merely prove to be a lull. … Global …
21st January 2019
Subdued levels of supply growth combined with increasing global demand will ensure that copper remains in a substantial market deficit and that prices will hold up well in 2019. … Copper prices to stand firm this …
18th January 2019
Commodity prices have generally risen this week, in large part due to optimism about further economic stimulus in China. We are more cautious as we expect the expansionary impact of stimulus to only feed through into the real economy in the second half of …
We think aluminium prices will drop from around $1,865 per tonne at present to $1,750 by end-2019 due to rising output and falling costs at a time of sluggish demand. … Lower costs, lower prices for aluminium in …
Following the decision by OPEC and its allies to reduce output for six months from January, the latest data showed OPEC’s commitment to remove much of the apparent excess supply in the oil market. But given that record growth in US production shows no …
17th January 2019
US crude stocks fell for the second consecutive week, despite an increase in production and a lower input to refineries. And the further build in gasoline and distillate stocks suggest softening demand. … US Weekly Petroleum Status …
16th January 2019
The trade talks between the US and China last week ended on a positive note, but the lack of any details dashed hopes of imminent relief for the ailing US soybean sector. Indeed, even if a deal is reached, we think that ample supply and lower Chinese …
14th January 2019
China’s commodity import volumes were generally weak in December. Admittedly, oil imports rose strongly but this was probably opportunistic buying on the back of the slump in price rather than a sign of strong domestic demand. Indeed, given the slowdown …
The prices of most commodities rose this week, buoyed by a surge in the oil price, firmer equity prices and optimism about progress in the US-China trade talks. We think that some sort of face-saving deal will be agreed, not least because President Trump …
11th January 2019
Rising global supply, softer demand and lower prices of other forms of energy will weigh on the price of liquefied natural gas (LNG) in 2019. … LNG prices to follow coal and oil …
We remain bullish on gold and silver prices and have revised up our end-2019 forecasts to $1,350 per ounce and $17.50 respectively, as we expect both metals to attract investors seeking safe havens. … New gold and silver price …
10th January 2019
Changes to our wider global macroeconomic and market forecasts have prompted us to re-assess the outlook for oil prices. We now expect slower growth in global demand and rising US production to return the oil market to a comfortable surplus by end-2019, …
US crude stocks fell in the first week of 2019 and domestic production was unchanged. The hefty gains in refined product stocks, despite the dip in the refinery utilisation rate, make it clear that growth in demand is slowing. … US Weekly Petroleum Status …
9th January 2019
After strong growth in 2018, we think that China’s imports of most industrial metals will be softer in 2019, reflecting slower economic growth and weaker domestic demand. … Weaker demand to weigh on Chinese …
China has announced a (small) increase in its reported official sector gold holdings for the first time in over two years, but regardless of whether this is repeated in the near future, central bank buying is set to remain a significant prop to gold …
8th January 2019
We suspect that there will be further falls in industrial metals prices as global economic growth slows and investors continue to flee from riskier assets. That said, economic and financial uncertainty provides a relatively positive backdrop for the …
4th January 2019
US crude stocks rose at the end of December as domestic production remained stable and crude inputs to refineries grew. While the slight increase in crude stocks is not too concerning, the surge in refined product stocks implies waning demand. … US Weekly …
Commodity prices have been volatile this week, driven more by macroeconomic and financial market developments than by commodity-specific fundamentals. Mounting concerns about the outlook for global growth, the recent slide in equity prices and falling US …
Oil prices continued to fall last month and we expect them to remain subdued given that, for now at least, the market is more than comfortably supplied. That said, the production cut announced by OPEC and its allies should take some of the current excess …
3rd January 2019
Clear signs of a slowdown in China’s economy, coupled with falls in global equity markets, weighed on the prices of most energy and industrial commodity prices in December. In contrast, the prices of precious metals rose, boosted by safe-haven demand. We …
2nd January 2019
Commodity prices are mostly falling on the first day of trading in 2019 as China’s December PMIs showed that the economy finished 2018 on a weak note. While the authorities are loosening policy, we only expect the economy to stabilise by mid-year, which …
The price of oil plunged again this week but, while we are negative on the outlook for 2019, we think that the latest falls are being driven more by bearish investor sentiment than fundamentals. After all, OPEC+ appears to be serious about its output …
21st December 2018
Closures of Chinese smelters in December mean that November’s sharp increase in global aluminium production will not be repeated. Consequently, the recent surge in stocks could start to unwind. … Global Aluminium Production …
20th December 2018
The price of gold has slowly and steadily risen in recent weeks to a 5-month high ahead of last night’s US Federal Reserve meeting. In this Metals Watch , we explain why we believe this rally in the gold price is warranted and why we expect it to rise to …
A small drop in US stocks coupled with signs of solid growth in products demand suggest that some of the market’s fears about oversupply may be overdone. We continue to expect that the output cuts pledged by OPEC+ will bring the market closer to balance …
19th December 2018
Slower economic growth in China, increasing production and the continuing shift towards natural gas and renewable energy for power generation will weigh on the price of coal in 2019. … Coal prices to run out of …
18th December 2018
Slower global economic growth will prove too much of a headwind for most commodity prices in 2019. What’s more, investor sentiment towards risky assets more generally is likely to deteriorate. These negative developments will more than offset any positive …
In recent months, the price of nickel has plummeted as investor sentiment has waned on concerns about demand. We think that prices will drop in 2019 as growth in global supply remains strong and demand continues to be subdued. … The electric vehicles boom …
17th December 2018
The prices of most commodities, including oil, traded in a narrow range this week, at least until Friday when weak economic data out of China prompted a synchronised fall in prices. We suspect that the lagged impact of slowing credit growth in China will …
14th December 2018
US crude oil stocks edged lower in early December as domestic output fell back and inputs to refineries remained high. Stocks may fall further in the coming weeks, if refinery activity remains strong. … US Weekly Petroleum Status …
12th December 2018
Amid growing concerns over a glut in the market, OPEC and its allies pledged to cut output. We estimate that these cuts will remove much of the apparent excess supply in the market, but think that the relief in oil prices will be short-lived as slower …
The price of zinc has fallen sharply since June but what is more remarkable is that the futures curve has shifted into a steep backwardation. We forecast that zinc prices will continue to drop in 2019 and that future prices will move into contango by the …
We expect a combination of slower global GDP growth and persistent rises in US shale output to lead to lower oil prices in 2019. Our end-2019 forecast for Brent is now $55 per barrel ($60 previously). … Slower growth in demand to weigh on oil …
11th December 2018
With the upcoming change to regulations on marine fuel sulphur content due to come into effect on January 2020, this Energy Watch will examine the implications for the oil market. While we don’t expect the IMO 2020 to have a large impact on the price of …
Chinese steel prices have slumped recently but with demand set to be weak over the coming months and less stringent pollution controls, we expect steel prices to drop by a further 20% over the next year. … No respite in sight for plummeting Chinese steel …
China’s commodity import volumes softened last month, underpinning our view that slower growth in the broader economy will take its toll on China’s commodity demand and prices. The only exception was oil imports, which hit a record high. … Domestic …
10th December 2018
The 1.2m bpd output cut announced by OPEC and its allies today should absorb much of the oil market surplus in the short term. As such, it has sparked a rally in oil prices and in commodities more generally. However, we still expect burgeoning supply from …
7th December 2018
Oil prices slumped in November as rising production in the US, Russia and Saudi Arabia prompted fears of oversupply. The market is now hoping that OPEC and its allies will agree to cut output, which should at least put a floor under prices. … Surging …
6th December 2018
US crude oil stocks fell sharply at end-November for the most part owing to a jump in US exports, which could be sustained given that crude prices in the US are still markedly lower than elsewhere. … US Weekly Petroleum Status …
The price of palladium rose above that of gold earlier this week for the first time since 2002, but gold has returned to a premium today and we think this premium will grow as the palladium price falters on the back of stuttering auto sales. … Palladium’s …
Steel and iron ore prices fell precipitously in November, as the reality of slowing Chinese demand growth finally filtered through into softer prices. We think that global demand will continue to falter, with China slowing further and that this will act …
5th December 2018
We expect OPEC and its allies to agree to cut oil output at this week’s OPEC meeting. This should at least put a floor under prices and may, depending on the size of the cut, boost prices. But with global economic growth set to slow and US oil output …
