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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 …
13th April 2018
Aluminium is the only commodity which has been directly affected by the latest round of sanctions on Russia, but even there we think that the boost to prices will be temporary. Instead, the surge in oil prices over the last few days has more to do with …
12th April 2018
OPEC revised up its forecast of non-OPEC production in 2018 again and estimated that the market was in a surplus in the first quarter. Admittedly, the cartel still expects the market to be in deficit this year. But we think that this is unlikely given the …
The sanctions on Russian producer, Rusal, are likely to support aluminium prices in the short term. However, Russian output is unlikely to collapse. What’s more, higher prices will encourage production elsewhere, notably in China, which will eventually …
Inventories of crude oil jumped last week as net imports rebounded and production rose again. The recent increase in prices is likely to encourage even more US production, which should weigh on prices by the end of the year. … US Weekly Petroleum Status …
11th April 2018
Commodity prices rebounded at the start of April on the back of concerns over US sanctions on Russia and escalating tensions in the Middle East, despite the dollar being flat. Indeed, only the precious metals sub-index failed to jump, although it still …
Trade protectionism has escalated dramatically since the start of the year and threatens to turn into a full-blown trade war. In this Metals Watch , we look at the most recent developments on trade and assess the likely impact on metals demand and prices. …
10th April 2018
Near-record non-commercial net-long futures positions in the oil market mean that prices could fall sharply if investor sentiment sours. … Oil prices vulnerable to a shift in investor …
Trade tensions escalated this week, as the US and China engaged in tit-for-tat announcements on proposed tariffs. The prices of commodities which would be affected by the tariffs generally fell. However, both sides have pledged to negotiate and prices …
6th April 2018
March was a mixed month for energy commodities. Oil prices jumped on the back of rising tensions in the Middle East and speculation that OPEC would extend its production cuts into 2019. However, prices fell back at the start of April on concerns over a …
5th April 2018
For now, there is optimism that ongoing negotiations between the US and China will prevent a significant escalation in trade tensions. However, there remains a risk of rising protectionism, which would inevitably weigh on commodities demand and prices. … …
Fears of a trade war between China and the US and heightened geopolitical tensions weighed on most metals prices last month as investors rotated out of risky assets and into safe havens. In contrast, the prices of US steel and gold were beneficiaries of …
4th April 2018
Inventories of crude oil slumped last week as exports rebounded and refineries processed more crude. However, production set another weekly record. We still expect prices to fall this year as surging output overtakes growth in demand, which could also be …
The price of copper has already fallen back sharply but we think this is more about heightened geopolitical risk than fundamentals. The price may revive in the near term if risks start to fade, but ultimately we think slower growth in demand this year …
3rd April 2018
Commodity prices drifted down in March, despite a relatively stable US dollar. However, given the slump in developed market equities, commodity prices held up relatively well. This was largely due to a surge in oil prices, which were driven higher by …
China’s unofficial and official manufacturing PMIs diverged again in March. The easing of pollution controls on heavy industry gave a boost to the official index, but slower growth elsewhere weighed on the unofficial index. This is consistent with the …
Commodity markets took something of a breather this week after last week’s sharp moves. Fears of a trade war between the US and China have receded a little, which helped to stabilise prices. The launch of a new crude contract in China stole the headlines …
29th March 2018
In this Commodities Watch , we review developments in the first quarter of this year and draw conclusions about what they mean for our price forecasts. … Taking stock of the first …
Inventories of crude oil rose last week as imports rebounded and production grew again. Admittedly, demand from refineries and consumers is strong. But we still expect soaring output to lead to higher stocks and lower prices in the second half of this …
28th March 2018
Oil prices have surged recently, partly due to expectations that OPEC will extend its production cuts into next year. However, some members of the group are emphasising the need for an exit strategy, to avoid shrinking OPEC’s market share by even more. …
The price of gold has benefited from heightened geopolitical risk in recent weeks. While prices are likely to remain well supported in the short term as global trade worries see investors rotate out of risky assets, we still think that higher US interest …
The latest trade data for India and China showed divergent trends in the two largest consumers. On the one hand, China’s gold imports remained robust although underlying demand appears to have weakened. On the other hand, India’s imports have continued to …
27th March 2018
Although China’s imports of most metals rose strongly in the first two months of 2018, other indicators imply weaker domestic demand, which could lead to lower volumes in the coming months. … China’s imports start the year on a strong …
26th March 2018
World Steel Association (WSA) data showed a 3.5% y/y increase in global steel production in February led by higher output in China, India and Brazil. US production also edged higher and we expect it to continue to rise as a result of the recent hike in …
Increasing tensions in the Middle East and expectations that OPEC will extend its output cuts have driven oil prices higher recently. However, even if President Trump reimposes sanctions on Iran, production is unlikely to fall by much. What’s more, we …
The US was the focus of markets this week. The Fed hiked its target rate by 25bp on Wednesday to 1.50%-1.75% but this had been widely anticipated and there was little reaction in commodity markets. In contrast, President Trump’s announcement of a 25% …
23rd March 2018
The Democratic Republic of Congo (DRC)’s decision to hike royalties on cobalt mining represents a threat to the electric vehicle industry and could accelerate the ongoing substitution with cheaper metals. That said, in the short term cobalt will remain a …
In our view, the new yuan-denominated crude futures contract should have no long-term impact on oil prices, even if it becomes a major benchmark. At any rate, a history of extreme volatility in China’s futures contracts and concerns about capital controls …
Contrary to almost all expectations, compliance with OPEC’s output quotas has been good so far. However, game theory suggests that higher oil prices increase the pay-off from cheating on the deal, which means that compliance could fall in 2018. What’s …
22nd March 2018
Robust demand and constrained supply have pushed the price of zinc higher over the past year. But fundamentals have deteriorated sharply in recent months and point to substantially lower prices ahead. … Zinc’s rally looks …
Somewhat counterintuitively, the price of gold gained 1.4% following the Fed’s decision to hike US interest rates for the sixth time in this tightening cycle. However, we think that the recent rally will not last as the Fed will tighten rates more …
The prospect of additional US rate hikes could weigh on commodity prices this year and will almost certainly lead to a lower gold price. But our negative outlook for industrial commodity prices is premised on other factors, including slower Chinese growth …
Inventories of crude oil fell last week as imports dropped and demand from refineries jumped. However, production is still rising rapidly. We expect soaring output to lead to higher stocks and lower prices in the second half of this year. … US Weekly …
21st March 2018
In this Commodities Watch, we will analyse supply and demand in the global rice market and explain why we think the price of Thai rice will struggle to hold on to its recent gains. … Rice prices to come off the …
20th March 2018
Despite the risk of further protectionist measures by President Trump and retaliation by China and the EU, we think that growth in world trade is likely to remain strong this year, which should help to ensure that oil demand will continue to be robust. … …
19th March 2018
There were few large moves in commodity prices this week. China’s activity data for the first two months of the year, published on Wednesday, were reasonably strong but failed to give a material lift to industrial commodity prices. The focus will move to …
16th March 2018
Commodity prices tend to go through extended boom and bust periods, sometimes known as super-cycles. The presence of super-cycles in commodity prices matters for a number of reasons but most importantly they can help to determine the long-term prospects …
The solar industry has been the fastest growing source of demand for silver in recent years. While we expect photovoltaic capacity to continue to increase at a fast pace over the next decade, we think thrifting and substitution will dent silver demand …
15th March 2018
Commodity prices have rebounded, after slumping in the wake of the global equity sell-off in late January, although they have dipped a bit lately, despite dollar weakness. The agriculture index has been the star performer since the start of 2018, while …
14th March 2018
Another rise in US production drove crude stocks higher last week, despite lower net imports and a rebound in demand from refineries. Surging oil supply from the US is a key reason why we expect oil prices to fall over the remainder of this year. … US …
There was another significant rise in OPEC’s forecast of non-OPEC production in 2018, reflecting recent strong growth in the OECD. However, the cartel still expects the market to be in a deficit this year. In contrast, we expect the market to be in a …
There have been some big jumps in stocks of copper, aluminium and zinc since the start of 2018, but inventories of the other base metals have fallen slightly. Given that we expect demand to soften this year as China’s economy slows, stocks of most metals …
The liquefied natural gas (LNG) market looks set to remain comfortably supplied this year, particularly as we expect growth in Asian LNG demand to slow. Given that we are also forecasting a fall in the oil price, LNG prices should ease back this year. … …
12th March 2018
The big news this week was confirmation of President Trump’s tariffs on US steel and aluminium imports on national security grounds. This sent US steel prices even higher, but weighed on prices in China. Meanwhile, the latest data show that China’s …
9th March 2018
President Trump’s tariffs on imports of steel and aluminium are likely to be a bigger deal for the price of US steel than aluminium. But US steel prices have already surged, which coupled with higher-priced imports, seems likely to depress demand. As …
Whilst we do not think that the renegotiation of NAFTA is likely to have a significant impact on demand for most energy commodities, the possibility of more protectionist measures and the subsequent reduction in trade and GDP growth could weigh on demand, …
8th March 2018
Dwindling mine supply and, more recently, strong winter demand for car replacement batteries have given a boost to the price of lead. However, demand is weakening which, coupled with increasing secondary output, should ensure that prices fall back over …
China’s commodity import volumes fell back sharply in February, but this can probably be explained by the week-long New Year holiday which fell in the middle of the month. The bigger picture is that total imports in the first two months of the year showed …
A rebound in net imports and jump in US production drove crude stocks higher last week. Surging oil supply from the US is a key reason why we expect oil prices to fall over the rest of this year. … US Weekly Petroleum Status …
7th March 2018
If the US were to withdraw from NAFTA, it could lead to downward pressure on US agricultural prices. But the impact on the more industrial commodities, including energy, is likely to be limited. … Do the NAFTA talks have implications for …
