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The prices of metals diverged last month. The prospect of a blanket tariff on US imports led to a jump in the price of US steel. At the same time, concerns about demand, notably from China, weighed on the prices of some of the other industrial metals, …
7th March 2018
Even if the US imposes sanctions on Venezuela’s oil sector we doubt that the impact on oil prices will be substantial. The US has already halved its imports from Caracas with no discernible effect on prices, whilst spare capacity in the rest of OPEC is …
6th March 2018
Strong growth in China’s stainless steel output and supply disruptions have buoyed nickel prices so far this year. In this Metals Watch , we take a look at the most recent developments in both demand and supply and assess the outlook for prices in 2018. … …
It was generally a negative week for commodity prices. Oil prices tumbled and precious metals prices were buffeted by Jerome Powell’s testimony, which all but ensured a rate hike this month. China’s official manufacturing PMI dipped sharply, which is …
2nd March 2018
Energy prices were volatile in February, buffeted by equity market gyrations and changing weather forecasts. Oil prices were particularly frothy, but still slumped on the month as US production continued to rise and stocks increased. Similarly, surging …
President Trump’s announcement of tariffs on steel and aluminium imports was expected. But what is perhaps more surprising is that the tariffs are particularly punitive and threaten to ignite retaliation, which could have significant ramifications for …
Commodity prices fell sharply in the wake of the sell-off in global equity markets in late-January, but have recovered much of the lost ground. The key sub-sectors of the S&P GSCI are now close to where they started the year. The main exception is …
1st March 2018
China’s unofficial manufacturing PMI edged higher in February, but the official survey reading dropped sharply. The trends in the PMIs are broadly consistent with the recent dip in metals prices. We expect prices to drop back further as economic growth …
A rebound in net imports drove crude stocks higher last week. Admittedly, imports are volatile so this could be reversed this week. But US oil production also resumed its upward trend and demand for gasoline eased back. We expect oil prices to fall …
28th February 2018
Global oil demand looks set to grow strongly again this year driven by accelerating economic growth in the US, Europe and India. However, a sharp slowdown in China’s economic growth will limit the increase in global oil consumption. Oil demand growth will …
27th February 2018
The latest trade data for India and China were a mixed bag. On the one hand, China’s gold imports bounced back, pointing to strong demand ahead of the New Year holiday. On the other hand, India’s imports softened and local prices suggest that this trend …
World Steel Association (WSA) data showed a 0.8% y/y increase in global steel production in January led by higher output in the EU, India and Turkey. US production remained weak, which is one reason why we remain more positive on the price of US steel …
26th February 2018
Global aluminium output continued to grow strongly in January, led by increases in China and other Asian countries. With no apparent shortage of supply, we expect prices to ease back in 2018. … Global Aluminium Production …
The prices of most precious and industrial metals fell back this week in the wake of a small appreciation of the US dollar. The FOMC minutes, released on Wednesday, all but ensured another US rate hike in March and put downward pressure on the price of …
23rd February 2018
Stocks of copper and aluminium have risen strongly since the start of 2018, but inventories of the other base metals have fallen. Supply was tight in the smaller markets last year, but it is now showing signs of a rebound at a time of softening demand. As …
Coal prices have fallen back a little since the start of this year as temperatures increased and supply picked up, but they remain high. This Energy Watch examines the outlook for demand and supply over the next few years and assesses the potential impact …
Inventories of crude oil slumped last week. However, this was mainly due to a drop in net imports which are notoriously volatile. As such, we think that stocks could rebound in the coming weeks, which coupled with further growth in US production should …
22nd February 2018
The recent slump in the Baltic Dry Index (BDI) may mean that demand for bulk commodities has softened, with negative implications for prices. But the relationship is far from straightforward. Indeed, even if the BDI revives, we think that the prices of …
There are early signs that investor sentiment in the metals markets is deteriorating, although more so for industrial metals than precious. Some of the technical indicators that we monitor have recently turned bearish and, in some cases, stocks are …
Commodity prices fell in the wake of the late-January correction in equity indices. Some appreciation of the dollar also weighed on prices, although the dollar has since fallen back. That said, all the main subsectors of the S&P GSCI Commodity Index, …
21st February 2018
US natural gas prices should rise this year as domestic demand and LNG exports experience an upsurge. However, a jump in supply will limit the increase in prices. … Strong demand to support US natural gas …
20th February 2018
The price of US steel has already benefited from the prospect of heightened protectionism in the US. Indeed, prices could actually fall back if President Trump decides to moderate his actions to reduce the risk of retaliation on US exports of other …
19th February 2018
The prices of most commodities rose this week, helped by a depreciation of the US dollar and a revival in global equity prices. Industrial metals, in particular, posted some large gains, although volumes were thin late in the week as the Chinese New Year …
16th February 2018
Surging supply and slowing demand growth are likely to push the global market back into a small surplus in 2018 which should put further downward pressure on oil prices over the next two years. However, we are not expecting prices to revisit their recent …
The price of iron ore has been remarkably stable recently despite a slump in Chinese steel prices. In this Metals Watch , we make the case that the market is factoring in too much optimism about demand at a time of rising supply. As such, we expect prices …
We are revising up our end-2018 forecasts for gold and silver prices to reflect the fact that we no longer expect the US dollar to strengthen this year. Nonetheless, we are not inclined to do a U-turn and suddenly become bullish on prices. Indeed, we …
15th February 2018
Inventories of both crude oil and gasoline rose again last week. Meanwhile, production in the US continued to grow. We expect the surge in US output to push the market back into a surplus this year, which will drag prices down. … US Weekly Petroleum …
14th February 2018
We are sceptical that President Trump’s infrastructure plan will be approved by Congress. What’s more, even if congressional approval is forthcoming, the reliance on state and local governments and private investors to do most of the heavy lifting appears …
13th February 2018
There was a significant rise in OPEC’s forecast of non-OPEC production in 2018, reflecting recent strong growth in the US. However, we still think that the cartel is underestimating growth in output this year and overestimating the strength of demand. … …
12th February 2018
The prices of metals and energy commodities slumped this week in the wake of the sell-off in global equity markets and a general move out of riskier assets. Markets shrugged off data showing strong Chinese commodity imports in January, but this may be …
9th February 2018
We think that concerns about surging supply in the US will put further downward pressure on oil prices in the coming months, even if global equity markets stabilise. … Oil prices have further to …
We expect the platinum market to be broadly in balance this year, after a sizeable surplus in 2017. However, the recent price increase means that this is already largely factored into prices. As such, we expect platinum to end the year at around current …
Commodity prices started 2018 on a high, bolstered by optimism about global growth prospects and the ongoing depreciation of the US dollar. However, we think there are now clear signs that growth in China’s economy is slowing and we expect the US dollar …
China’s commodity import volumes rebounded strongly in January. Admittedly, this partly reflects seasonal volatility associated with the Chinese New Year. But it also seems likely that demand from the industrial sector held up quite well at the start of …
8th February 2018
Production increased dramatically last week, mainly due to revisions to the historical data. However, output is growing much more quickly than many expected which should continue to put downward pressure on prices over the rest of the year. … US Weekly …
7th February 2018
Global gold demand fell to its lowest level in eight years in 2017. Weak investment demand accounted for most of the decline. With demand from India and China likely to remain subdued and Fed tightening discouraging investment, we think that global …
6th February 2018
The latest falls in commodity prices have more to do with risk aversion than any deterioration in underlying demand and supply fundamentals. That said, we had always expected commodity prices to fall this year as we suspect that prices are reflecting too …
We expect the prices of most energy commodities to fall back over the next few months as the weather normalises and the dollar stabilises. Indeed, prices fell at the start of February amid a broader market selloff and growing signs that supply is …
The prices of most metals continued to make gains in the first month of 2018. The persistent depreciation of the US dollar supported the prices of all the metals, but notably that of gold. However, concerns about demand, notably from China, started to …
5th February 2018
The prices of many commodities drifted lower over the course of the week. But the negative tone was set more firmly on Friday by the release of data showing strong growth in US non-farm payrolls and an uptick in average earnings. This gave a boost to the …
2nd February 2018
India’s budget for FY18/19, released yesterday, was a mixed bag for gold. On the one hand, incomeboosting measures for the rural population are good news for jewellery demand. On the other hand, the budget has made it more costly to import gold. On …
Biofuels have become an important source of demand for many agriculturals over the past decade. In this Commodities Watch , we argue that concerns about the environment and the diversion of food towards fuel production, less government support and a …
Commodity prices trended higher in January, with all the major sub-sectors of the S&P GSCI recording gains. Energy led the way, rising by 4.5% m/m. Dollar weakness was the main driver of the rally in commodities prices last month. … Dollar weakness …
1st February 2018
China’s unofficial and official manufacturing PMIs diverged a little in January but both imply that activity held up relatively well. That said, they were not sufficiently strong to explain the gains in most industrial commodity prices. As such, we …
A slump in demand for oil from refineries and another increase in production combined to boost US crude inventories last week for the first time since mid-November. At least part of the recent surge in oil prices has been driven by the persistent falls in …
31st January 2018
Our analysis shows that dollar weakness can explain much of the recent strength in the price of gold. As such, given our view that the US currency will appreciate this year, we think that those gains will soon be reversed. … Is there more to the gold …
We think that about half of the surge in oil prices since the start of December can be attributed to the slump in the US dollar. However, a stronger dollar should put some downward pressure on oil prices over the course of 2018. That said, growing supply …
Most commodity prices rose this week on the back of further broad-based falls in the US dollar. At the same time, the euro strengthened as ECB President Mario Draghi struck a fairly positive note at Thursday’s press conference, declaring that the robust …
26th January 2018
The fall in crude stocks last week was overshadowed by rising US output, lower refinery runs and ballooning gasoline inventories. Indeed, US oil production is now within touching distance of 10m bpd. This is a key reason why we expect WTI prices to fall …
24th January 2018
World Steel Association (WSA) data showed a 3.9% y/y increase in global steel production in December and a 5.3% rise in 2017 as a whole. Expectations that the capacity closures in China would prompt a sharp fall in output were once again disappointed. We …
