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We think that OPEC’s production is likely to rise significantly over the next couple of months. That said, it could fall back later in the year as output from Iran is curtailed and Venezuelan production continues to decline. … OPEC Monthly Oil Market …
11th July 2018
The recent rally in the Baltic Dry Index (BDI) of freight costs is somewhat surprising given rising protectionism. However, it appears that much of the rise can be explained by robust demand for coal. As such, it can’t be interpreted as a sign that fears …
10th July 2018
Profit-taking and deteriorating investor sentiment were the main drivers of the recent fall in the price of cobalt. As such, for now, we are sticking with our end-year forecast of $100,000 per tonne. However, if the US were to impose tariffs on auto …
The most significant threat facing oil markets is the possibility that US sanctions will lead to a sharp drop in exports from Iran. This Energy Watch will examine how much oil could be lost and what might happen to prices under various scenarios. … How …
9th July 2018
Almost all commodity prices fell this week as the deadline for the imposition of US tariffs on China loomed large. The tariffs came into effect on Friday, and China retaliated in kind. Also on Friday, a strong US non-farm payrolls number for June …
6th July 2018
Despite mounting trade tensions, the price of gold has slumped in recent weeks prompting some commentators to question its safe-haven appeal. While we expect gold to remain under pressure in the short term, the longer-term prospects for prices are much …
Inventories of crude oil rose last week due to a jump in net imports and lower demand from refineries. Meanwhile, the Brent-WTI spread is likely to remain fairly narrow until stock levels at Cushing improve. … US Weekly Petroleum Status …
5th July 2018
Oil prices were volatile in June, falling in the first half of the month on fears of a trade war and slowing economic growth in China. But a drop in US inventories, a smaller-than-expected increase in OPEC’s output and the threat of tougher sanctions on …
4th July 2018
Metals prices were caught up in the general market sell-off following the ramping up of tensions between the US and China in June. (See Chart.) Signs of softer economic growth in China also contributed to the negative investor sentiment towards metals. We …
We do not think that the latest slump in China’s equity prices will make a meaningful difference to the country’s commodity demand. However, it does suggest that investors are coming round to our long-held view that the economy is set to slow in 2018, …
3rd July 2018
Overview – Most commodity prices fell in June, depressed by escalating trade tensions and a stronger US dollar. Energy prices were the main exception. … Rising protectionism drags on commodity …
2nd July 2018
China’s unofficial and official manufacturing PMIs point to a somewhat softer economy in June. We expect further weakness ahead, which will continue to weigh on the prices of most commodities. … China’s PMIs signal weaker …
Most commodity prices fell this week on fears of a slowdown in the Chinese economy and rising trade tensions between the US and China. The exception was oil, which jumped on the announcement of a new OPEC deal, falling US inventories and concerns that …
29th June 2018
Slowing economic growth and rapidly rising fuel efficiency, partly due to a surge in the number of electric vehicles, mean that growth in demand for oil will slow and eventually peak over the next twenty years. At the same time, plentiful oil reserves …
28th June 2018
With anti-diesel sentiment unlikely to dissipate anytime soon, we expect the price of platinum to continue to trade at a discount to palladium until 2020 when a combination of demand and supply factors should push it back to a slight premium. However, the …
Concerns about the escalation in trade tensions and the potential negative implications for global GDP growth have sparked a sell-off in commodity markets this month. However, even if fears of a trade war fade, we expect that the prices of most industrial …
27th June 2018
Inventories of crude oil slumped last week due to a jump in exports and higher demand from refineries. The narrowing of the Brent-WTI spread this week may put a dampener on exports, but outages in Canada could also curb imports. As such, net imports may …
The latest trade data for India and China show divergent trends in imports of gold by the two largest consumers. China’s gold imports rose strongly in May on the back of robust wholesale consumption, while India’s imports remain subdued. Looking forward, …
26th June 2018
World Steel Association (WSA) data showed a 6.6% y/y increase in global steel production in May, driven by higher output in China, India, Japan and the US. We expect this trend to continue over the coming months, which is a key reason behind our bearish …
25th June 2018
We expect OPEC and Russia to increase production by about 1m barrels per day over the rest of the year, which should ensure ample supply and help to pull prices down. … OPEC agrees to boost …
Most commodity prices fell sharply this week on concerns that the rise in trade tensions between the US and China could spiral into a full-blown trade war. There were particularly sharp drops in the prices of the US agricultural commodities targeted by …
22nd June 2018
The prices of industrial metals have been caught up in the general market sell-off following the ramping up of trade tensions between the US and China. We expect prices to continue to trend lower over the coming months even if fears of a trade war fade. … …
21st June 2018
Inventories of crude oil fell last week due to a jump in exports and higher demand from refineries. However, if China acts on its threat to reduce its purchases of US crude, it will be difficult to maintain exports at this level which could lead to higher …
20th June 2018
In the last week, there has been a renewed escalation in trade tensions between the US and China. The US has announced that it is pressing ahead with tariffs and China has responded in kind. In particular, China is targeting US agricultural and energy …
Global aluminium output ticked up in May, driven by higher production in Asia ex-China and the GCC. We expect growth in output to accelerate over the coming months as higher prices and the prospect of US sanctions on Russia prompt producers elsewhere to …
Tensions between the US and China have escalated over the past few days, with both countries announcing hefty tariffs. Yet, the price of gold fell on the news. In this Metals Watch we first look at the reasons why the gold price did not behave as we had …
19th June 2018
The retaliatory tariffs which China has threatened to impose on oil imports from the US would not in themselves change the balance of supply and demand in global oil markets. But if China chooses to source more oil from Iran, or to scale back its …
18th June 2018
The Fed’s decision to hike its target rate by 25bp and the announcement that the US was going to press ahead with a 25% tariff on imports of Chinese goods prompted a rally in the dollar, which in turn weighed on commodity prices. China has already said it …
15th June 2018
We think that differing outlooks for demand will cause the prices of energy commodities to diverge over the rest of this year, despite their recent close correlation. … Oil and coal prices to fall, but gas to remain …
14th June 2018
Adverse weather this year has prompted us to revise down our estimates of the forthcoming global grain and soybean harvests. Stocks remain at comfortable levels, but we have also nudged up our price forecasts in recognition of the somewhat tighter …
Somewhat counterintuitively, the price of gold edged higher following the Federal Reserve’s decision to hike US interest rates for the second time this year. But we don’t think this is the start of a rally. In contrast, we are more positive on the …
Inventories of crude oil fell last week due to lower net imports and higher demand from refineries. However, US oil production posted another jump. Output is growing at a much faster rate than demand from refineries, which should eventually lead to lower …
13th June 2018
We think that forecasts of even higher non-OPEC supply this year will push the cartel into increasing output at its meeting next week. … OPEC Monthly Oil Market Report …
12th June 2018
The ongoing wage negotiations at several copper mines are likely to keep prices well supported in the short term. However, we think that growing supply and only subdued demand will weigh on copper prices in the second half of the year. … Copper rally …
The EU, Canada and Mexico all announced retaliatory tarrifs on certain imports from the US this week. Although we doubt that this is the start of a full-blown trade war, the risk of one is greater now than it has been for many years. A resultant slowdown …
8th June 2018
China’s commodity import volumes rebounded in May owing to a pick-up in demand for metals. However, imports of energy commodities remained weak. We still think that commodity import growth is likely to slow this year as the headwinds to domestic demand …
While a jump in US Treasury yields has weighed on the price of gold over the past month, the price of silver has rallied. However, we doubt that silver will outperform gold for long. … Silver’s outperformance won’t …
7th June 2018
Over the past month, the price of lead has surged. This appears to be the result of a clampdown on recycling plants in China, which has reduced scrap lead supply since the start of the year. However, we still think that prices will fall back over the …
6th June 2018
Inventories of crude oil increased last week due to higher net imports and strong growth in US crude production. Indeed, we expect the rapid rise in US output to weigh on crude prices later in the year as logistical constraints ease and more US oil is …
The dramatic surge in US oil output so far this year has weighed on the price of WTI and widened the Brent-WTI spread. But we still expect US production to grow strongly in 2018-19. An increase in pipeline capacity will facilitate exports of US oil, which …
5th June 2018
For the most part, metals prices rose in May despite the dollar appreciation. Robust demand and tighter supply buoyed the prices of aluminium, nickel and lead. However, we still think that slower credit growth in China will weigh on activity and …
In the last month, commodity prices have risen or held steady, despite a sharp appreciation of the US dollar. We think that the long-run inverse relationship will be restored in the second half of this year as the dollar stabilises and the prices of most …
Oil prices were volatile in May, rising in the first half of the month as President Trump re-imposed sanctions on Iran, then falling in the second half due to rising US production and speculation that OPEC would boost output in June. The Brent-WTI spread …
It has been a busy week on the news front. The early part of the week was dominated by the political crisis in Italy, which weighed on the euro. Later in the week, President Trump announced that he was lifting the temporary exemptions from steel and …
1st June 2018
Commodity price indices surged in May despite a jump in the US dollar. Oil prices got a boost from the re-imposition of US sanctions on Iran which threaten to reduce oil output by up to 1m bpd. However, we doubt that the impact on supply will be that …
China’s unofficial and official manufacturing PMIs for May point to a firm economic performance and are broadly consistent with the gains in industrial metals and coal prices last month. However, we still think that slower credit growth will weigh on …
Inventories of crude oil fell last week due to a dip in net imports and strong demand from refineries. But the pick-up in crude production is more than sufficient to meet the increase in demand, which should result in lower prices later in the year. … US …
31st May 2018
Tighter supply and strong demand have led to a rapid drawdown of nickel exchange stocks and given a lift to prices. But with supply starting to pick up and more subdued demand growth, we expect the price of nickel to fall back in the second half of this …
President Trump’s decision to impose a 25% tariff on US steel imports has sent the price of US hot-rolled coiled steel skyrocketing. But how sustainable is the rally in prices? In this Metals Watch we take a closer look at the recent developments in the …
Warmer weather, slower economic growth in China and the rise in renewable and natural gas-fired power generation should help to reverse the recent jump in demand for coal and reduce prices over the next few years. … Waning demand for coal to weigh on …
30th May 2018
