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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
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 …
