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The US is set to take centre stage next week as it re-imposes sanctions on Iran’s oil on Monday. While this may spark bargain hunting, after this week’s slump in prices, any relief rally should be short lived. Indeed, it was announced today that eight …
2nd November 2018
After a lacklustre first half of the year, global gold demand rose in Q3, albeit marginally. We think that consumer demand may well remain soft in Q4, but the upturn in ETF holdings in October could continue over the next year and play a central role in …
1st November 2018
Commodity prices, including oil, fell on concerns about softer economic growth and some appreciation of the US dollar. We expect a weaker demand outlook to continue to weigh on the prices of the more industrial commodities. In contrast, the prices of a …
The latest survey data out of China paint a subdued picture of economic growth and offer little support to the prices of industrial and energy commodities. What’s more, any policy stimulus to boost activity will take some time to translate into a pick-up …
Total exchange stocks for most industrial metals have declined year-to-date with cancelled warrants up in most cases, which implies strong demand. The major exception is tin. In 2019, we expect a reversal in this stocks picture as we think that the global …
31st October 2018
Crude stocks rose for a sixth consecutive week boosted by higher US oil output and another release from the SPR. That said, product stocks fell sharply but we think this has more to do with subdued refinery runs than strong demand. Indeed, we expect …
The price of aluminium in Shanghai has been appreciably lower than on the LME for much of this year, while the reverse has been true for lead prices. Neither is sustainable and we think that global aluminium prices may converge sooner than those of lead. …
30th October 2018
Concerns about the outlook for demand, amid sharp declines in global equity prices, are weighing on the prices of most commodities. Even the oil market, which has been focussed on supply issues for much of this year, has woken up to the risk of slower …
26th October 2018
An economic slowdown in China and less severe cuts to Chinese capacity should lead to lower industrial metals prices over the next year. In contrast, precious metals prices should gain from safe-haven flows and asset reallocation. By 2020, slower supply …
Oil and coal prices look set to ease back over the next year as slower global economic activity constrains demand. At the same time, recent high prices have been incentivising supply. In contrast, natural gas demand is likely to remain robust, boosted by …
25th October 2018
The latest trade data for China and India show gold imports tumbled in September and higher gold prices in October could mean that imports remain weak, despite the Indian wedding season. … China and India’s gold imports …
The economic slowdown that we expect in the US over the next few years is a key factor in our generally downbeat outlook for commodity prices. … What a US slowdown would mean for …
Growth in global steel production accelerated in September to 4.4% y/y, with mills ramping up in China and the US buoyed by healthy margins in both countries. We expect winter production cuts in China will not prevent strong y/y growth in world output in …
24th October 2018
Although crude stocks rose again, a larger-than-expected draw on gasoline stocks stole the headlines. However, we think gasoline stocks will rise again when refineries come out of maintenance. … US Weekly Petroleum Status …
Global aluminium output in January-September was only slightly higher than a year ago as production gains in the US, India and the Gulf states have been offset by lower output in China and Europe. We expect that prevailing low prices will act as a ceiling …
22nd October 2018
Commodity markets will have little in the way of relevant data to focus on next week. Instead, prices are likely to be driven more by developments on the political and policy fronts. The case of the missing Saudi journalist will no doubt remain in the …
19th October 2018
Our forecast of slower global growth next year points to weaker growth in commodities demand and lower prices. Of course, the prices of many non-oil commodities have already fallen sharply this year on the back of mounting protectionism and signs of a …
Automobile demand has been sluggish for several months in China. This will weigh on demand for most metals and lead to lower prices too, especially for platinum group metals (PGMs) prices. … Weak auto sales signal lower metals prices …
18th October 2018
Inventories of crude oil jumped again as exports fell back sharply. The latest data are likely to have been distorted by Hurricane Michael but crude stocks have been building for some weeks and should soon start to exert some downward pressure on prices. …
17th October 2018
The USDA’s latest projections have not changed our view that ample supply will remain a problem for the grains and soybean markets. That being said, a fall in corn stocks, coupled with the potential for higher US demand, mean that we are relatively more …
15th October 2018
We do not expect Saudi Arabia to cut oil production in response to US criticism over a missing journalist, not least because it will want to preserve the “anti-Iran axis” with the US. However, if the Kingdom were to cut output on a similar scale as it did …
The focus of commodity markets next week is likely to be the raft of data out of China, culminating in Q3 GDP and September industrial output and investment spending on Friday. The September data, in particular, will be scrutinised for further indications …
12th October 2018
The solid growth in China’s commodity import volumes appears at odds with data pointing to softer economic activity. As such, we expect import volumes to turn down in the coming months. … China’s commodity imports holding up …
Inventories of crude oil surged for the second consecutive week as refinery output dropped and there was an increase in production. We expect stocks to continue to build in the coming weeks, which should take some of the heat out of oil prices. … US …
11th October 2018
Supply concerns have led to a rise in Chinese steel prices this year. However, weaker growth in demand at a time of rising production suggests that prices will fall back sharply in 2019. … Chinese steel prices set to …
The latest data suggest that Saudi Arabia is indeed capable of increasing production in order to offset falls in output in Iran and Venezuela. Weaker oil demand growth and higher supply from both OPEC and non-OPEC producers should lead to lower oil prices …
There is now a large differential between the prices of US-based WTI oil and the more international benchmark, Brent. In our view, this spread could widen further in the near term, but we expect it to start to narrow over the course of 2019-20 as …
9th October 2018
With LME Week starting today, it appears an opportune time to review the main discussion points that will be the hot topics at this seminal event in the metals calendar, and to share our views on them. … Five key questions for LME …
8th October 2018
Metal prices rebounded strongly in September, in a relief rally, as the latest round of US-Chinese tariffs were lower than initially feared. However, slower growth in Chinese manufacturing and the prospect of less severe Chinese supply cuts this winter …
5th October 2018
The latest leg-up in the oil price, to around $85 per barrel, was fuelled by persistent fears of a supply shortfall. However, we remain of the view that the market’s worst fears will not be realised and that prices will drop back over the next 6-12 …
Oil prices have surged in the last month as the market priced in a slump in Iran’s production due to the re-imposition of US sanctions. However, there are now clear signs of weaker demand, which should start to weigh on prices. … Oil at a four-year …
Inventories of crude oil surged last week, in large part as a result of higher net imports. We think we could see further stock builds in the coming weeks amid signs of softer demand and weak exports. … US Weekly Petroleum Status …
3rd October 2018
Commodity prices jumped in the second half of the month despite a stronger US dollar. Concerns about Iranian production and news that OPEC didn’t increase output at one of its technical meetings meant that the energy sub-index significantly outperformed …
2nd October 2018
The price of Brent crude nudged $85 per barrel today, reflecting concerns about the re-imposition of US sanctions on Iran. However, we remain of the view that supply from other OPEC and non-OPEC producers will offset lower Iranian output. This is …
Supply-side developments were the key driver of most commodity markets this week, but they are pushing prices in opposing directions. In the oil market, supply concerns sent Brent crude to a 46-month high. In contrast, signs that China might adopt looser …
1st October 2018
The downturn evident in China’s PMI readings for September is consistent with the recent weakness in industrial metals prices. The authorities have started to ease policy, which should start to translate into a modest pick-up in activity next year but, …
The price of sugar has dropped sharply in response to a supply glut, making it one of the worst performing commodities so far this year. In this Commodities Watch , we outline some recent trends in the sugar market and explain why we think prices should …
28th September 2018
Alumina prices have jumped in recent months on supply-side concerns. We think that the current supply disruptions will be resolved and we expect prices to fall by end-2019. … Alumina prices to …
27th September 2018
The latest trade data for India and China show gold imports by the two largest consumers rising on lower prices, but this is unlikely to last as local prices have rallied, which has already started to crimp demand. … China and India Gold Imports …
Inventories of crude oil rose as demand from refineries weakened and US production ticked up. Gasoline stocks also rose, despite lower refinery runs, underpinning our assessment that growth in US demand is softening, which is one reason why we expect the …
26th September 2018
In recent days, the price of zinc has rebounded a little after plummeting over the summer. In this Metals Watch we will discuss why we think that any rally will prove short-lived. A slew of new mines and restarts, coupled with weak demand from China’s …
Growth in global steel production slowed in August to 2.6%y/y, but the bigger picture is that it has expanded by a rapid 5.4% y/y in the first eight months of this year. However, we think that growth in demand is slowing, which should eventually lead to …
25th September 2018
The prices of most commodities rose this week as part of a more general rebound in financial markets. Although both the US and China announced another round of tariffs, there was some relief that the tariffs will be levied at 10% rather than 25% and the …
21st September 2018
Growth in global oil demand looks set to ease in 2019, driven by the expected economic slowdowns in China and the US, along with subdued consumption in Europe. High oil prices and mounting protectionism are likely to weigh further on oil demand. … Oil …
We think that stagnating supply growth, solid demand and lower global stocks will prompt some recovery in the price of copper in 2019. … Copper prices to rise in …
20th September 2018
Global aluminium output surged by 4.0% y/y in August, the fastest rate in over a year, owing to restarts in the US and higher production in China and India. This fits with our expectation that the prospect of China’s anti-pollution cuts and US tariffs is …
Inventories of crude oil declined for the fifth consecutive week as net imports fell and refinery runs remained high for the time of the year. That said, refinery runs have started to ease back, which is a trend that is set to continue and which should …
19th September 2018
At first glance, there might appear to be some tension between our forecast that oil prices will fall in 2019, while industrial metals prices will end the year a little higher. In fact, it is more a reflection of the very different starting points and the …
We think the prices of both gold and silver will rise in 2019 but silver looks set to outperform. It will benefit from its higher beta, a recovery in investor interest and a sharp slowdown in mine supply growth. … Gold/silver price ratio to fall from …
17th September 2018
There was no clear trend in commodity prices this week. The price of oil rose on data showing a sharp fall in US crude stocks, while metals took some comfort from the announcement of new trade talks between the US and China. However, optimism subsequently …
14th September 2018
