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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
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 …
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 …
