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Sentiment towards metals has diverged since the start of 2017. While investors have remained firmly bullish on precious metals, they have turned more bearish on industrial metals even as prices have continued to rise. Although, in some cases, this year’s …
28th November 2017
The oil market is largely expecting OPEC to extend its production deal until the end of 2018 at its meeting at the end of November. This Energy Watch will look at some of the options available to the cartel and how supply and prices might react to various …
27th November 2017
The latest trade data for India and China show that gold imports remained weak in October. We had always thought that demand in India would soften in the second half of the year as a result of the new tax regime. In China, demand usually picks up ahead of …
Commodity prices drifted a bit towards the end of the week as the US markets were closed for the Thanksgiving holiday. Otherwise, the prices of most of the industrial and energy commodities rose, supported by a somewhat weaker US dollar. In contrast, the …
24th November 2017
Changes to the tax treatment of some North Sea oil and gas fields will no doubt be welcomed by the industry and could help to prevent production falling back over the next few years. However, we doubt that any increase in the UK’s oil output will be large …
23rd November 2017
The November crop estimates from the US Department of Agriculture (USDA) painted quite a bearish picture for grains and soybean prices. In this Commodities Watch , we discuss the latest changes to the USDA projections and assess what they mean for our …
Higher exports and the continued recovery in demand from refineries helped to drawdown stocks of crude oil last week. While we think that stocks will continue to fall, for the next few weeks at least, growing US production is likely to weigh on prices …
22nd November 2017
World Steel Association (WSA) data showed a 5.9% y/y increase in global steel production in October and a 5.3% rise in January-October, driven by growth in most of the largest steel-producing countries. … Global Steel Production …
The tightening of global monetary policy over the next few years represents a headwind to commodity prices, especially precious metals. However, the reduction in equilibrium interest rates over the past decade means that central banks will not need to …
The latest output data for October, released today, point to a tighter aluminium market. Whilst the planned closures in China could provide some support to prices over the coming months, growth in demand has also slowed. As such, we expect prices to edge …
20th November 2017
Total exchange stocks of nearly all the metals have fallen since the start of the year, which goes some way to justifying the rally in prices. The exceptions are tin and copper inventories. However, while the tin price has drifted lower of late, the …
The falls in the prices of industrial commodities this week were in line with the broader downturn in riskier assets, including equities. However, factors specific to commodity markets, notably China’s weak activity data for October and an increase in US …
17th November 2017
Government-mandated steel production cuts in China this winter will exacerbate the decrease in demand for iron ore resulting from a weak construction sector and a slowdown in economic growth. As such, we feel that prices have further to fall. … Iron ore …
The prices of many industrial commodities rallied in the wake of Donald Trump’s win in the US presidential election, buoyed by hopes of substantial fiscal stimulus and infrastructure spending. Market euphoria, however, appears to have been misplaced so …
China’s October activity and investment data underpin our view that the economy started to slow in the second half of this year and point to softer growth in metals demand. … China Industrial Metals Demand Monitor …
16th November 2017
Commodity indices have surged over the last month, driven by higher oil prices. This has led to a break in the usually close inverse relationship with the US dollar. The energy sub-index was the best performing sector of the S&P GSCI Commodity Index, …
15th November 2017
Rising production and imports caused a build in crude inventories last week, but a fall in consumption of oil products will add to concerns about a slowdown in demand, which could weigh on prices. … US Weekly Petroleum Status …
The revival in the US coal industry is due to a surge in demand from China and solid domestic consumption, rather than any changes to legislation. However, rising supply, slowing economic growth in China and more use of natural gas and renewable energy …
14th November 2017
Lower OPEC output and brighter prospects for demand mean that the group is likely to be relatively cheerful at its meeting at the end of the month. However, unless the group reduces its production further, the rebalancing of the market is likely to stall. …
13th November 2017
The price of oil jumped this week on rising tensions in the Middle East, which also lent some support to the gold price. In contrast, the prices of industrial metals fell, after strong gains a week earlier. Indeed, profit-taking probably explains some of …
10th November 2017
After years of oversupply, there are now clear signs that the PGM market is tightening. Falling mine supply should help the market to rebalance, but a higher rate of recycling could put a cap on prices at least in the near term. This is one factor behind …
Global gold demand fell in Q3 to the lowest level in 8 years, continuing the downward trend so far in 2017. Weak jewellery demand and stalling ETF inflows were the main factors behind the decline. With physical demand likely to remain relatively subdued …
9th November 2017
Even if OPEC extends its output cuts until the end of next year, stocks are still likely to exceed their fiveyear average, which should put some downward pressure on oil prices next year. … OPEC unlikely to reach stocks …
After a strong start to the year, the price of cotton has drifted lower since. In this Commodities Watch , we will discuss the main drivers of the cotton market and how they will affect prices in 2018. In particular, we will focus on the impact of China’s …
8th November 2017
A sharp rise in US demand for products is in line with other indicators showing a pick-up in consumption recently. But record levels of oil production will delay the wider oil market rebalancing. … US Weekly Petroleum Status …
China’s commodity import volumes plummeted in October. While a shift in the timing of the MidAutumn Festival explains much of the decline, we think that there are now clear signs that domestic demand is cooling. … China’s commodity imports …
Oil prices jumped in recent days on the back of rising geopolitical tensions in the Middle East but, assuming that a direct conflict between Saudi Arabia and Iran is avoided, the fundamentals suggest that prices are likely to surrender their gains in the …
7th November 2017
The medium-term outlook for nickel demand has improved given that electric vehicles are likely to have a high nickel content. But, for now, the market is more than comfortably supplied. … Too soon to get excited about …
6th November 2017
In a news-filled week, the prices of most industrial commodities and oil performed strongly. President Trump nominated Jerome Powell to be the next Fed Chair, but there are some concerns about whether he is sufficiently qualified for the job. Meanwhile, …
3rd November 2017
Elevated geopolitical risks and dovish market expectations for Fed tightening have supported the price of gold this year. While we have revised up our end-2017 and end-2018 forecasts, we still expect prices to edge lower over the coming year. … Gold price …
After looking like they may have run out of steam in September, the rallies in coal and oil prices returned with a vengeance last month. Indeed, speculation about supply restrictions – by OPEC for the oil market and at Chinese mines for the coal market – …
2nd November 2017
The prices of most metals rose in October, despite some appreciation of the US dollar and somewhat softer economic data out of China. Optimism about future demand, notably associated with the electric vehicle sector, and the prospect of capacity cuts in …
The large drop in stocks of crude and gasoline last week would appear, at first glance, to be a further sign that the oil market is tightening. But much of the reduction in crude stocks was due to lower net imports whilst production rose again. These …
1st November 2017
October was another strong month for the prices of industrial metals and oil as optimism about demand prevailed while prospects for supply deteriorated. We are more cautious, however. There are now clear signs that China’s economy is starting to slow …
China’s official and unofficial manufacturing PMIs diverged again in October but they both paint a subdued picture of China’s activity. Somewhat ironically, lower commodity output is a key factor weighing on the PMIs, which in turn is underpinning prices. …
The stability in US natural gas prices since early this year has led many market commentators to assume that prices will be stuck at current levels for the foreseeable future. This Energy Watch will briefly take stock of why prices have been so flat …
31st October 2017
Since the start of 2016, zinc has doubled in price. A combination of mine closures (owing to depletion), production cuts and solid demand have been the key drivers of the rally. But speculative activity has also played a role. In this Metals Watch we look …
Commodity prices have risen in the second half of 2017, boosted by strong Chinese demand and, in some cases, heightened geopolitical risk. Looking ahead, we expect prices to drift lower over the course of 2018 as optimism about China’s demand fades and …
30th October 2017
Growth in non-OPEC supply and lower geopolitical risks means that the price of Brent is unlikely to stay above $60 per barrel, even if OPEC extends its output cuts until the end of the year. … Price of Brent likely to slip back below …
The price of crude oil jumped this week and briefly breached $60 per barrel in afternoon trading on Friday on the back of optimism that OPEC will extend its output cuts to the end of 2018. In contrast, the industrial metals fell sharply on Friday, dragged …
27th October 2017
The latest trade data for India and China show that imports remained subdued in September. We had always believed that demand in India would weaken in Q3 as a result of the new tax system but the government’s decision to reverse an order that brought the …
26th October 2017
A rebound in production and a slight rise in net imports led to an increase in crude stocks last week. On the other hand, stocks of gasoline and distillates fell as demand picked up and net imports declined. … US Weekly Petroleum Status …
25th October 2017
The rebound in China and India’s coal imports is likely to be short-lived as higher domestic production and slowing consumption growth reduce the need for imports. … Rise in coal imports likely to be …
There was no clear trend in China’s September metals import data. Indeed, in many cases, we think incoming shipments appeared at odds with the underlying trends in domestic demand and supply. High prices could be deterring buying, but it may also be a …
24th October 2017
World Steel Association (WSA) data showed a 5.3% y/y increase in global steel production in January-September, with output rising in all the major producers except Japan. That said, global output was down by 2.3% from August’s high. … Global Steel …
23rd October 2017
China’s September activity and investment data and Q3 GDP suggest that the economy is holding up well. However, both point to weakness in the construction sector, which will weigh on demand for metals. Nonetheless, growth in other metals-intensive sectors …
Commodity prices initially wavered this week as the dollar strengthened. However, sentiment turned on Friday so that oil and most of the industrial metals ended up on the week. Concerns about oil supply from the Kurdistan region of Iraq gave a boost to …
20th October 2017
The latest aluminium output data for September, released today, point to a tighter market. However, ShFE stocks have continued to rise indicating that the market is amply supplied for now. We expect the price of aluminium to edge lower over the coming …
The dramatic rise in renewable power has led to a sharp reduction in demand for coal and, until recently at least, had pushed coal prices down by more than 50% since 2011. A rapid rise in alternative fuel vehicles and improvements in fuel efficiency mean …
A drop in net imports and lower production contributed to a fall in crude inventories last week. At the same time, gasoline and distillate stocks moved higher as demand for petroleum products slumped. … US Weekly Petroleum Status …
18th October 2017
