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We think that the worst fears over supply will not be realised and that slower growth in global demand will prompt a significant fall in the oil price in 2019. However, logistical constraints on US output growth and persistent concerns about the impact of …
13th September 2018
We had always expected metals prices to decline this year on the back of a slowdown in China’s economy. However, even we have been surprised by the scale of the falls in prices, which we think have been exacerbated by investor selling. In this Metals …
12th September 2018
There was a hefty decline in inventories of crude oil last week, which was in part driven by higher refinery runs. However, stocks of gasoline and distillates both rose, as demand faltered. The latest data support our view that growth in demand is slowing …
The latest data show that Saudi Arabia still has sufficient spare capacity to increase production if it needed to offset falls in output in Iran and Venezuela. Slower growth in demand and higher supply both from OPEC and non-OPEC producers should put …
China’s commodity import volumes slipped back in August, which is consistent with generally softer economic data. While there are signs that the government is moving to a somewhat more accommodative policy stance, it will be some time before this …
10th September 2018
The prices of most commodities fell this week on persistent concerns about the negative impact of rising protectionism on demand. A softer unofficial August China manufacturing PMI reading on Monday was particularly worrying news for industrial metals as …
7th September 2018
Inventories of crude oil fell again last week, despite a rise in net imports. Meanwhile, US production, excluding Alaska, ticked up. We still expect slowing consumption growth and rising production in the US over the next year to weigh on prices globally. …
6th September 2018
Previously volatile iron ore prices have barely moved in the last six months. Despite ample supply, strong growth in China’s steel production supported prices. That said, we expect steel output to fall back in the coming months which will lead to lower …
5th September 2018
For the most part, metals prices declined in August in the wake of escalating trade tensions and signs that economic growth in China is losing momentum. Negative investor sentiment exacerbated the moves down in prices. However, we think that, in most …
4th September 2018
August was a good month for energy commodity prices. Oil prices jumped as investors focused on the prospect of lower supply from Iran while the price of US natural gas ticked up as stocks remained well below their five-year average. Elsewhere, LNG prices …
Most commodity prices fell in August on the back of ongoing global trade tensions and worries over an economic slowdown in China. … Oil bucks the negative …
3rd September 2018
China’s PMI readings for August confirm our view that the economy is slowing as a result of subdued domestic demand. Although some policy easing is underway, it will be some time before this translates into an upturn in economic activity and higher …
It was another good week for the price of oil as concerns about lower Iranian output as a result of US sanctions continued to lift prices. In contrast, a ratcheting up of the US rhetoric on protectionism lead to further falls in most industrial metals …
31st August 2018
It looks increasingly likely that the Chinese government will levy a 25% tariff on imports of US liquefied natural gas (LNG). But we suspect that any tariff will have only a limited impact on prices as China can source LNG elsewhere. However, US producers …
The relationship between the number of US drilling rigs and oil prices appears to have broken down recently as drilling rigs have failed to rise in line with oil prices. This Energy Watch will examine what may have caused growth in drilling rig numbers to …
30th August 2018
World Steel Association data, released earlier this week, showed a 5.8% y/y increase in global steel output in July, driven by higher production in China, India, the US and the EU. We expect this trend to continue in the coming months, which underpins our …
Inventories of crude oil fell last week due to a drop in net imports, despite a slump in demand from refineries. Another slight decline in US production excluding Alaska is concerning, but we think that output should continue to grow over the rest of the …
29th August 2018
The latest trade data for India and China show divergent trends in imports of gold by the two largest consumers. China’s gold imports dropped on signs that the economy is slowing, while India’s imports recovered but from a very low level. Looking ahead, …
28th August 2018
The price of Brent rose by around 6% this week, reflecting concerns about the negative impact of US sanctions on Iran’s production. The mid-week trade talks between the US and China were inconclusive but expectations were low going into the talks and the …
24th August 2018
Whether the Saudi Aramco float actually happens or not should make little difference to the oil market. After all, it is now clear that Saudi Arabia is no longer intent on artificially boosting prices to raise the valuation of Aramco, Saudi Aramco is …
23rd August 2018
After surging to a seven-year high in mid-April on the back of the US Treasury’s decision to impose sanctions on Russian aluminium producer, Rusal, the price of aluminium has since collapsed. While we expect aluminium to remain under pressure in the short …
US corn farmers face considerable uncertainty over the potential for exports given rising global protectionism. What’s more, if export volumes dip, the US ethanol industry is unlikely to absorb any excess corn in the market. As such, a revival in the …
Inventories of crude oil fell back last week as refinery demand remained strong and net imports dropped back. However, the rise in gasoline and product stocks does point to weaker consumer demand, which we think will start to weigh on prices in the coming …
22nd August 2018
The sale of crude oil from the US Strategic Petroleum Reserve (SPR), announced yesterday, is not large enough to have a significant impact on global oil prices. That said, given the hefty size of the SPR, it could be used to dampen the impact of any …
21st August 2018
Global aluminium output was up by nearly 3% y/y in July, owing to higher production in China and India. We had warned that this could happen as the prospect of China’s anti-pollution winter cuts and US sanctions on Russia’s Rusal is encouraging producers …
20th August 2018
There was no respite for commodities prices this week. Industrial commodities took their cues from the downbeat China activity data which fuelled concerns about demand. At the same time, a stronger dollar, on the back of a deepening crisis in Turkey and …
17th August 2018
While investor sentiment is likely to remain the main driver of copper prices this year, we expect declining supply and growing demand from the green energy sector to give a boost to prices in 2019 and 2020. … Has copper further to …
16th August 2018
After breaking down in April and May, the relationship between the dollar and commodity prices seems to have re-established itself. Given our view that the dollar will remain strong into 2019, commodity prices are unlikely to recover this year. … Dollar …
Inventories of crude oil jumped last week due to a surge in net imports, despite record demand from refineries. Even though consumption is strong at the minute, we expect a slowdown in US economic growth to weigh on demand in 2019 and 2020. Combined with …
15th August 2018
Given our view that the dollar will remain strong into 2019 and that growth in jewellery demand will continue to soften, we have recently revised down our end-2018 forecast for the price of gold. That said, we think that the medium-term prospects are much …
The latest data show that Saudi Arabia still has plenty of room to increase production if it needed to offset falls in Iran and Venezuela. As such, the group’s production should continue to rise, at least until OPEC is no longer under producing its …
13th August 2018
As a major consumer of commodities, any slowdown in China’s economy has negative implications for global commodities demand and prices. That said, the impact is actually likely to be quite nuanced. Indeed, we think there is still scope for growth in …
10th August 2018
Despite generally bearish investor sentiment, the prices of a number of commodities rose this week. In particular, the price of aluminium jumped on plant closures in Australia and persistent concerns about the impact of US sanctions on Russia. At the same …
A preference for the US dollar as a safe haven has weighed on gold prices over the past few months. Given our view that the dollar will remain strong into 2019 and that growth in jewellery demand will continue to fall, we have revised down our end-2018 …
9th August 2018
Inventories of crude oil slipped last week but there are signs that demand for products is faltering, reflected in the rise in gasoline stocks. Indeed, lower consumer demand in response to high prevailing prices is a key reason why we expect the price of …
8th August 2018
China’s commodity import volumes revived in July, but from a low base a month earlier. Indeed, we think import volumes will fall back in the coming months in line with the slowdown in economic activity. … Strength in China’s imports unlikely to be …
China’s industrial activity held up well in the first half of 2018 but there are now clear signs that the economy is losing momentum, which is likely to prevent any significant gains in industrial metals prices. … China Industrial Metals Demand & Supply …
Metals prices continued to decline in July on the back of rising trade tensions, concerns about a possible downturn in demand and a deterioration in investor sentiment. We expect prices to remain weak over the coming months as there are now clear signs …
7th August 2018
Oil prices slumped in July as trade tensions rose, ports reopened in Libya and fears of a slowdown in global economic growth increased. However, the short end of the Brent futures curve moved into contango suggesting that investors expect prices to rise …
6th August 2018
Most industrial and energy commodity prices fell again this week as mounting protectionism and China’s subdued PMI data for July raised concerns about the outlook for commodities demand. That said, prices did recover some lost ground on Friday in the wake …
3rd August 2018
The prices of most metals have plummeted over the past few months, in large part reflecting the appreciation of the US dollar. But negative investor sentiment exacerbated the moves down in prices. Looking ahead, we expect slower growth in China and an …
Global gold demand declined to the lowest level since 2009 in the first half of 2018 and we expect it to remain softover the coming months as a strong dollar, coupled with rising US interest rates, discourage purchases. This underpins our view that the …
2nd August 2018
Inventories of crude oil jumped last week due to a rebound in net imports. Admittedly, overall production slipped back a little, but this was due to a temporary disruption. Meanwhile, gasoline demand was flat compared with the same time last year, which …
1st August 2018
Commodity prices dropped in the first half of July, despite a slight depreciation of the US dollar. Concerns about trade tensions were the main reason behind the falls. Lower trade volumes would lead to a decline in demand for fuel products such as …
The latest falls in China’s PMI readings underpin our view that China’s economy is entering a softer patch, which is likely to prevent any significant rebound in commodity prices in the coming months. … China’s PMIs point to subdued commodities …
Energy prices have generally risen over the past few months, despite an appreciating dollar. Strong demand and, in the case of oil, fears about disruptions to supply have boosted prices. However, we suspect that prices will fall back in many cases as …
31st July 2018
Concerns about a possible downturn in demand are expected to remain a factor weighing on most commodity prices in the coming months. There are now clear signs that China’s economy has entered a softer patch and the rise in global protectionism could lead …
30th July 2018
Commodity prices rebounded a little this week as the EU and US agreed to hold off on any additional tariffs while trade negotiations are underway. However, prices may struggle to hold on to these gains as this temporary truce could easily fall apart. Next …
27th July 2018
The price of rhodium has so far been insulated from deteriorating investor sentiment towards platinum group metals (PGMs) more generally. While rhodium is still likely to outperform its sister metals this year, we think that slower economic growth in …
World Steel Association (WSA) data showed a 5.8% y/y increase in global steel production in June, driven by higher output in China, India and Japan. We expect this trend to continue over the coming months, which underpins our bearish view on prices this …
26th July 2018
