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Agricultural commodities were some of the star performers this week as a truckers’ strike in Brazil raised concerns about supply. In contrast, metals prices struggled, as the trade talks between China and the US failed to deliver tangible results, and oil …
25th May 2018
World Steel Association (WSA) data showed a 4.1% y/y increase in global steel production in April, driven by higher output in China, India, the EU and the US. We expect this trend to continue over the coming months, which underpins our bearish view on …
The next OPEC meeting on 22nd June will probably decide the direction of oil prices over the rest of the year. This Energy Watch will examine how OPEC is progressing towards the aims it set out when it first announced the production cuts. It will then …
Investor sentiment in the metals markets has deteriorated since the start of 2018, although more so for precious metals than industrial. Some of the technical indicators that we monitor have recently turned bearish and, in most cases, stocks are building. …
The price of oil has soared since mid-February. In this Commodities Watch , we will discuss whether the rise in oil prices has positive implications for the prices of other commodities. … Does the oil price determine other commodity …
24th May 2018
Inventories of crude oil rose last week as net imports jumped despite a widening of the Brent-WTI spread. The spread is likely to remain wide over the next few months as surging output and logistical constraints keep WTI prices relatively low. … US Weekly …
23rd May 2018
We expect global oil consumption to rise steadily this year on the back of strong economic growth. However, if oil prices remain around their current levels or rise further, consumption growth could slow sharply in 2019. This is an additional reason to …
22nd May 2018
Global aluminium output fell slightly in April. This was largely the result of lower production in North America, where temporary disruptions weighed on supply, and Western Europe. We expect growth in output to pick up pace over the coming months as …
21st May 2018
Oil prices continued to benefit from the uncertainty surrounding President Trump’s decision to pull the US out of the 2015 nuclear deal with Iran, this week. However, heightened geopolitical risks failed to give a boost to the price of gold, which fell …
18th May 2018
The recent fall has brought the price of gold close to our end-2018 forecast of $1,300. While Fed policy tightening is usually negative for gold prices, higher demand for inflation hedges and a weaker dollar should prevent prices from falling much further …
17th May 2018
The GSCI commodity price index has surged over the last month, despite the rise in the US dollar. However, the rise in the broad index is entirely due to the jump in oil prices – which was driven by the re-imposition of US sanctions on Iran. Other …
16th May 2018
Inventories of crude oil fell last week as net imports slumped. However, we remain of the view that surging US oil output will weigh on prices later in the year. … US Weekly Petroleum Status …
Total exchange stocks of most industrial metals have fallen over the past month but cancelled warrants have in most cases also declined, which points to lacklustre demand. Aluminium and tin were the main exceptions. We expect inventories to build over the …
14th May 2018
We still think that OPEC’s forecast that the market will be in a large deficit this year is too ambitious. But we do expect it to be close to balance as higher prices depress demand growth and encourage non-OPEC production. … OPEC Monthly Oil Market …
Donald Trump’s announcement that he will pull the US out of the nuclear agreement with Tehran and re-impose sanctions on Iran’s crude exports caused oil prices to jump this week. Meanwhile, China’s commodity import volumes held up in April, with the …
11th May 2018
Even though we doubt that the US sanctions will cause a large fall in Iran’s oil output, the rest of OPEC and Russia have enough spare capacity to prevent a shortage if US sanctions turn out to be more restrictive than we think. However, a sharp drop in …
10th May 2018
Supply of platinum group metals (PGMs) is likely to fall in 2018, as reserve depletion in South Africa takes its toll. Nonetheless, we expect prices to decline from current levels as demand is also softening. … More downside ahead for …
After two years of sizeable deficits, there are signs that the tightness in the zinc market is easing, which explains why prices have fallen sharply since the start of the year. We think that prices will decline further over the coming months as supply …
Inventories of crude oil slumped last week as net imports fell. In contrast, US crude production rose to another record. The recent surge in crude prices is likely to lead to even faster growth in output than we had previously expected, which should drag …
9th May 2018
The re-imposition of US sanctions on Iran is unlikely to have a major impact on global oil supply. However, geopolitical tensions have intensified and if Iran decides to pull out of the nuclear deal, the impact on oil supply could be more severe. As such, …
After two years of declines, we expect silver mine supply to pick up in 2018 as higher industrial metals prices encourage by-product output. This is one reason behind our relatively bearish view on silver prices this year. … Silver mine supply to bounce …
8th May 2018
China’s commodity import volumes held up in April, although the late timing of the Chinese New Year holiday is still having a disruptive effect on the data. We expect growth in import volumes to slow in the coming months as a result of earlier policy …
There was little in the way of market-moving data or news this week. China’s PMI data for April were broadly unchanged on the month, painting a picture of relative stability. Meanwhile, although the US nonfarm payrolls figure on Friday was somewhat below …
4th May 2018
Global gold demand fell sharply in Q1, primarily owing to lower investment. We expect demand to remain subdued as Fed tightening raises the opportunity cost of holding an asset like gold which bears no interest. This is one reason behind our relatively …
3rd May 2018
Oil prices jumped in April as tensions escalated in the Middle East, especially the risk that the US will re-impose sanctions on Iran, and speculation increased that OPEC will extend its output cuts into 2019. Meanwhile, US natural gas prices remained low …
The surge in availability of liquefied natural gas (LNG), which does not need pipeline infrastructure, has raised the prospect of a more fungible natural gas market. In this Energy Watch , we look at the recent trends in the regional gas markets and …
April was a month of two halves for most metals. The imposition of US sanctions on Russia sent the prices of several industrial and precious metals – notably aluminium, nickel and palladium – surging in the first half of April. But as the worst fears of …
2nd May 2018
Inventories of crude oil jumped last week as net imports increased, demand from refineries fell and production continued to grow. Indeed, we still expect surging US crude production to lead to lower prices later in the year. … US Weekly Petroleum Status …
China’s unofficial and official manufacturing PMIs for April painted a relatively stable picture. It seems likely that the return of industrial capacity, after anti-pollution measures closed plants during the winter, has provided a one-off boost to …
Commodity price indices surged in April despite a jump in the US dollar. Fading fears of a global trade war gave a lift to riskier assets more generally, while escalating tensions in the Middle East and US sanctions on Russia pushed up oil and aluminium …
1st May 2018
In this Commodities Watch , we take stock of three of the most serious geopolitical risks that have emerged over the past few months. These are the prospect of a trade war between the US and China, US sanctions on Russia and escalating tensions in the …
30th April 2018
Despite the prospect of tighter monetary policy in the US, the price of gold has proved particularly resilient so far this year. We think that strong safe-haven demand on the back of heightened geopolitical risk has been a key factor sustaining prices. In …
The earlier surge in oil and industrial metals prices came to an abrupt halt this week as oil stabilised and there were sharp falls in the prices of some metals. In particular, the US Treasury’s announcement of a four-month delay to the sanctions on …
27th April 2018
China’s industrial activity held up well in the first quarter of 2018, but year-on-year growth in some of the more metal-intensive sectors slowed from the previous quarter. Moreover, we expect the drags from slower credit creation and tighter fiscal …
26th April 2018
The latest trade data for India and China showed that imports of gold in the two largest consumers weakened in March. Higher prices probably discouraged purchases. We had warned that this could happen as consumers in China and India tend to be very …
Inventories of crude oil jumped last week as demand from refineries fell and production continued to grow. Indeed, we still expect surging US crude production to lead to lower prices later in the year. What’s more, demand for gasoline dropped back after …
25th April 2018
World Steel Association (WSA) data showed a 4.0% y/y increase in global steel production in March, driven by higher output in China, India and the US. We expect this trend to continue over the coming months, which underpins our bearish view on prices this …
The rise in oil prices, fall in crude inventories and surge in non-OPEC production, especially in the US, mean that OPEC is likely to gradually increase output next year rather than extend its cuts. … Three reasons why OPEC won’t prolong its …
The US Treasury’s decision to soften its position on sanctions against Russian aluminium producer, Rusal, has sent the price of aluminium tumbling in the past couple of days. We think that prices will fall further as slower growth in China feeds through …
Growth in tin demand is expected to slow this year, but remain slightly stronger than the historical trend. However, constrained supply should support prices, which we expect to be relatively flat from here. … Tin to tread …
23rd April 2018
Geopolitical concerns continued to be the main driver of commodities prices this week. In particular, fears that US sanctions could be broadened to include Russian producer, Nornickel, buoyed the prices of nickel and palladium. Oil was also up strongly as …
20th April 2018
Global aluminium output continued to grow in March. We expect growth in output to pick up pace over the coming months as higher prices and the effects of the US sanctions on Russia prompt producers elsewhere to ramp up capacity utilisation. This is a key …
Given the rise in potential risks to supply, stronger-than-expected demand in Q1 and slumping output in Venezuela, we are revising up our end-2018 forecasts for the prices of Brent and WTI. But we still think that prices are likely to fall significantly …
Commodity prices have generally had a strong start to the year, boosted in particular by risks to supply. However, in many cases, supply has not been disrupted yet and the worst fears of supply shortfalls may not materialise. On the demand side, there are …
Total exchange stocks of most industrial metals have fallen over the past month, but cancelled warrants have in most cases also declined which points to lacklustre demand. We expect inventories to build over the course of 2018 as supply bottlenecks ease …
18th April 2018
Inventories of crude oil slipped last week as net imports slumped. But the big surprise was a jump in demand for gasoline, to a new record. However, we would caution that such large moves in the weekly data are often reversed in subsequent data releases. …
Geopolitical concerns intensified this week and led to sharp increases in those commodities at risk of disruptions to supply. In particular, the price of aluminium surged following the announcement of US sanctions on the world’s second largest producer, …
13th April 2018
At least part of this week’s increase in oil prices is justified by the sudden escalation in tensions in the Middle East and resulting risk to oil supplies, either from sanctions or damage to oil infrastructure. However, higher prices will encourage …
The US sanctions against Russia have supported the prices of platinum and palladium this week. However, Russian output is unlikely to be affected. This, coupled with weakening demand fundamentals, suggests that the recent gains in prices won’t be …
China’s commodity import volumes picked up in March, after the holiday-related slump in February. However, we expect import volumes to ease back in the coming months as activity slows as a result of earlier policy tightening. … Commodity import volumes …
