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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 …
12th December 2018
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 …
We continue to expect that slower economic growth in two of the largest consuming economies – the US and China – will weigh on commodity prices in 2019, even if China and the US manage to reach an agreement on trade. … Demand concerns to the …
3rd December 2018
China’s November survey data point to persistent weakness in economic activity, which will continue to be a factor weighing on the prices of commodities, particularly industrial metals. … Little to cheer in China’s …
Mounting US protectionism, particularly towards China, has been a key factor weighing on commodity prices for much of this year. As such, news that China and the US are to resume talks provides some reprieve. Of course, the ceasefire is only temporary and …
For the most part, commodity prices moved in a narrow range this week, but this relative stability may come to an abrupt end soon. Presidents Trump and Xi are set to dine together on Saturday at the G20 and trade will be high on the agenda. While a deal …
30th November 2018
Despite dropping to a multi-year low recently, we think that tin prices will fall further over the next year as Chinese demand falters. However, this should mark a turning point for the tin price, not least because production from Myanmar appears to have …
29th November 2018
US crude oil stocks continued to climb in the latest data, adding to signs of oversupply in the market and putting additional pressure on OPEC to move to curb output at its meeting in early December. We expect OPEC output to start to fall in the coming …
28th November 2018
We think that the prices of precious metals, except palladium, will rise in 2019, in part because we expect an early end to Fed tightening and stronger safe-haven demand in the second half of the year. … Investors to return to precious …
The upcoming OPEC meeting is likely to result in Saudi Arabia agreeing to reduce its oil output. But we think that any cut will be at the more modest end of the spectrum as the authorities balance the need to placate President Trump with a desire to put a …
27th November 2018
The recent oil price crash has led some to ask if contagion might spread across commodities. However, the decline largely represented a catch-up with base metals and we think the latest drops may prove premature. That said, we expect oil and industrial …
We expect that the combination of low stocks and strong demand growth will ensure that the average price of US natural gas will be higher in 2019 than in 2018, despite steadily increasing supply. … A lot of hot air in the US natural gas …
26th November 2018
Gold imports by China and India slumped on a y/y basis in October. However, we expect a rebound in imports to India in the coming months as gold prices in rupee terms have dropped back. … China and India Gold Imports …
Oil prices fell by 7-8% last Friday on market fears of oversupply, but we suspect that producers will start to withhold exports in the coming months, putting a floor under prices. … Oil price falls too far, too …
After a week when the prices of Brent and WTI fell by around 10%, there could be further big moves in commodity prices next week depending on the outcome of the meeting between Presidents Trump and Xi at the G20 summit on Friday. Industrial metals prices, …
23rd November 2018
Growth in global steel output accelerated in October to 5.8% y/y, but we expect it to slip back in the coming months as Chinese steel prices have slumped and there are mounting signs of weaker demand. … Global Steel Production …
The Baltic Dry Index (BDI, a measure of shipping costs for the world’s dry bulk commodities) is often cited as a bellwether of economic growth. As such, the recent slump should be cause for concern. However, in this Commodities Watch , we show how its …
22nd November 2018
The silver market has moved into its first meaningful surplus since 2010 as investor demand has plunged but we expect this will rebound next year, causing the surplus to dwindle and silver prices to rally. … Silver surplus unlikely to last …
21st November 2018
Persistently high US oil production meant that crude stocks built again, despite a revival in refinery activity. What’s more, rising output of petroleum products means that we could start to see product stocks start to increase in the coming weeks. All …
We think that the prices of industrial metals will drop in 2019, in part because we expect investor sentiment to remain weak owing to slower economic growth in China and the US. … Investors are right to be …
20th November 2018
Rising Asian output explains most of the surge in global aluminium production in October and fewer cutbacks in China and restarts in North America should ensure strong y/y supply growth in the coming months. … Global Aluminium Production …
The recent divergence between oil and natural gas prices gathered momentum this week and although we think prices overshot, we remain of the view that the outlook for natural gas prices in 2019 is positive, while we see little upside for oil. The oil …
16th November 2018
The price of iron ore has jumped on the back of expectations of weaker anti-pollution measures in China. In this Metals Watch we explain why we think higher prices will prove short-lived. … Iron ore prices to …
A combination of higher domestic production, low refinery runs and a fall in exports contributed to the eighth consecutive weekly build in US crude stocks. If nothing else, the latest data bolster the case for OPEC and its allies to decide to cut …
15th November 2018
China’s latest activity and investment data paint a mixed picture of metals demand but we expect growth in consumption to slow until mid-2019. … China Industrial Metals Demand …
This week’s dramatic moves in US energy prices reflect underlying fundamentals to some extent. Indeed, we remain positive on the outlook for natural gas prices in 2019, but see little upside for oil. That said, we think that commodity markets are …
14th November 2018
In light of recent sharp energy price movements, it is worth re-iterating our outlook on prices. We expect that differing projections for demand and supply will prolong the deviation in the price of energy commodities next year. … Divergence in energy …
A temporary cut in output from Nyrstar’s Port Pirie smelter will not stop lead prices falling further as auto sales are slowing and lead-acid batteries see market share eroded by electric cars. … Lead looking for longer-term …
13th November 2018
Following the recent 20% slump, the price of oil is now close to our end-year forecast and we expect prices to fall further in 2019 as growth in demand slows and supply remains ample. … Taking stock of our oil price …
OPEC has revised down its forecast for oil demand in 2019 and raised its non-OPEC supply projection. This is consistent with our view that the market will be in surplus next year, which will weigh on prices. … OPEC Monthly Oil Market Report …
The price of oil (Brent) has dropped by around a fifth from its October peak and we expect it to continue to fall to $60 per barrel by end-2019. Supporting this view is our forecast that the oil market will be in a small surplus next year, an assessment …
9th November 2018
At first glance, the USDA’s latest set of projections appeared bearish for the grains and soybeans markets. However, most of the upward revisions to stocks and supply can be explained by revisions to historical Chinese data. That said, there was still …
We expect the average price of US natural gas to rise in 2019 on a combination of low stocks and strong growth in demand, both domestic and external. This will more than absorb steadily increasing supply. … US gas to hold on to its …
We think that cobalt prices will rebound, by approximately 30%, between now and mid-2019, aided by a temporary halt to cobalt sales and exports from a major operation in the DRC. … Cobalt caught in a …
8th November 2018
We believe that the price of US steel is currently too high, despite the 25% tariff on imports, and that slower growth in demand and higher domestic supply should prompt prices to fall back in 2019. … US steel prices likely to prove …
China’s commodity import volumes generally held up well last month, despite the ongoing slowdown in broader economic activity. However, all the signs point to weaker import growth in the coming months. … Import demand proves resilient, for …
The last-minute waivers on US sanctions granted to eight of Iran’s largest customers suggest supply in the oil market should be more than ample, underpinning our forecast of a further fall in oil prices. … Oil supply fears allayed for …
7th November 2018
US crude stocks increased, boosted by an unexpectedly large jump in US oil output and a small rise in net-imports of crude. Meanwhile, gasoline stocks edged lower. The latest data are consistent with our view that a combination of rising US supply and …
After strong gains in September, most base metals prices fell in the past month, as global growth concerns made investors more risk averse. Against this backdrop, precious metals generally gained, with gold boosted by a return to net ETF buying. We expect …
6th November 2018
Oil prices plummeted in October on the back of clear signs of a pick-up in supply, rising US crude stocks and concerns about slower global growth. US sanctions on Iran’s oil may bolster prices in the near term, but we expect a market surplus in 2019 to …
2nd November 2018
