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Electric vehicle sales have skyrocketed over the past few years. As a result, the sector has become a growing source of demand for metals. In this Metals Watch , we look at the latest trends in electric vehicles sales and infrastructure and assess the …
11th January 2018
Adverse weather conditions in the US and China have boosted US gas consumption and highlighted China’s dependence on coal. But as the weather normalises, and domestic gas infrastructure improves, we expect China’s ongoing shift towards natural gas to …
US crude stocks continued to fall last week but product stocks have increased sharply since November as demand from refineries has not been matched by higher product consumption. This may pressure refineries to start maintenance runs soon, which could …
10th January 2018
At first glance, the recent poor performance of silver would appear surprising given that both gold and industrial metals prices rallied in 2017. However, we think that reduced safe-haven demand has undermined silver, as investors tend to favour gold when …
9th January 2018
The prices of most commodities trended higher this week, supported by a weaker US dollar. Falling US stocks and heightened geopolitical risk pushed the oil price higher. In contrast, industrial metals mostly fell despite the pick-up in China’s Caixin …
5th January 2018
A combination of falling US stocks, mounting geopolitical risk and OPEC’s deal to extend its output cuts has pushed the price of oil higher in recent weeks. However, we think that rising non-OPEC output will prevent any marked shortfall in oil supply in …
Aluminium production in China is likely to continue to fall over the next few months as the Chinese authorities impose output cuts. While this would give the impression of a tighter market, Shanghai-based stocks have soared and we expect demand to weaken …
Persistent strength in demand from refineries and an increase in exports pushed US crude stocks lower last week. However, petroleum product stocks jumped as demand plummeted during the holiday season and US oil production rebounded to a near-record high. …
4th January 2018
The prices of most metals rallied in 2017, bolstered by strong Chinese economic growth, a weaker dollar and, in some cases, supply concerns. But, overall, industrial metals outperformed precious metals last year, as Fed tightening acted as a powerful …
A number of temporary factors, including unusually cold winter weather and supply disruptions, gave a last-minute boost to the price of oil in 2017. Coal and LNG prices also benefitted from high seasonal demand. However, the oil supply disruptions have …
Commodity prices surged in December as the US dollar weakened. Looking at the sector breakdown, most sub-sectors of the S&P GSCI rose, led by industrial metals. Agriculturals were the only exception, ending the month broadly flat. … Optimism fuels a …
2nd January 2018
China’s official and unofficial manufacturing PMIs diverged again in December, but both point to a solid performance at end-2017. However, we remain cautious on the outlook for 2018 and expect tighter monetary conditions to weigh on economic activity. … …
The prices of most commodities edged higher this week, bolstered by a weaker US dollar. There is now evidence that the government-mandated winter cuts in China have started to take their toll on industrial metals production. However, we doubt that output …
21st December 2017
US crude stocks fell sharply again last week as refineries churned out more products and net imports dropped back. However, stocks of petroleum products are still rising meaning that some refineries may be tempted to start maintenance runs early. This …
20th December 2017
World Steel Association (WSA) data showed a 3.7% y/y increase in global steel production in November and a 5.2% rise in the year-to-date with all major steel-producing countries recording increases over the year. Whilst production in China fell sharply on …
The latest output data for November point to a tighter aluminium market. We had always expected this to happen as the planned closures in China began last month. However, growth in demand has also slowed. As such, we expect prices to edge lower over the …
Strong Chinese demand for oil this year has helped to rebalance the market. However, a slowing economy, an increasing focus on anti-pollution measures in major cities and a reduction in strategic stockpiling could weigh on China’s growth in demand for oil …
19th December 2017
Total exchange stocks of most metals fell in 2017 on a combination of constrained supply and solid growth in China’s demand in the first half of the year. We expect stocks to build over the course of 2018 as supply bottlenecks ease and growth in China’s …
18th December 2017
It has been a good week for industrial metals, with prices rising on the back of data showing relatively stable industrial activity and solid growth in investment spending in China. The Fed’s rate hike on Wednesday had been widely anticipated and there …
15th December 2017
China’s latest activity and investment data point to more subdued metals demand than earlier in the year. Despite curbs on supply, we still think prices are reflecting undue optimism about demand. … China Industrial Metals Demand Monitor …
14th December 2017
Somewhat counterintuitively, the price of gold gained 1.6% following the Fed’s decision to hike US interest rates for the third time this year and the fifth time in this tightening cycle. The lack of revisions to the Fed’s inflation and interest rate …
Commodity indices took a tumble at the start of December, coinciding with a slight appreciation of the US dollar. The downturn in commodity prices over the month was broad-based, with falls in all the sub-sectors of the S&P GSCI Commodity Index. … …
There were no major surprises in the latest set of estimates published by the US Department of Agriculture (USDA). Projected 2017/18 ending stocks for the grains and soybeans were raised further, whilst both production and ending stocks of cotton were …
13th December 2017
US crude stocks fell sharply again last week. However, surging US production could potentially push the global oil market back into a surplus next year. What’s more, stocks of petroleum products are rising rapidly, meaning that demand from refineries may …
Today’s report showed that OPEC’s production fell again last month. However, the group also increased its expectations of non-OPEC supply growth. We think that the cartel is still being too optimistic with its projections for non-OPEC output next year and …
The weather is arguably the main determinant of agricultural commodity prices. However, there are other factors that influence prices, including the oil price, the US dollar, global growth prospects and interest rates. In this Commodities Watch , we will …
12th December 2017
While a flattening US yield curve has, at times, been associated with a rising gold price, the relationship is far from perfect. Indeed, although we expect the curve to continue to flatten over the next year, we think that the price of gold is more likely …
Commodity prices mostly fell this week. A stronger US dollar – following the US Senate’s approval of the “Tax Cuts and Jobs Acts” last Saturday – was the main reason behind the declines in prices. Data showing robust Chinese commodity import volumes in …
8th December 2017
China’s commodity import volumes rebounded strongly in November, after the October weakness. The data may have been boosted by holiday-related distortions but it also appears that policies to curtail industrial output in a bid to curb pollution are …
The recent rise in prices makes a large jump in US oil production next year relatively certain. However, rising costs, fewer efficiency gains and maturing fields will start to weigh on growth towards the end of 2018 and into 2019. … Are forecasts for US …
7th December 2017
A large drop in crude stocks was eclipsed by an even bigger jump in gasoline inventories. Weak demand for fuel products and a rebound in imports would weigh on oil prices over the next few months. … US Weekly Petroleum Status …
6th December 2017
The prices of most metals fell in November, reflecting concerns about somewhat softer economic data out of China. The outlier was the ferrous sector, where prices surged on the prospect of Chinese production cuts during the winter. Meanwhile, in recent …
5th December 2017
There has been much chatter about an imminent tightening in the copper market, partly as a result of a shortfall in supply but also because of strong demand growth associated with the green economy. In this Metals Watch , we assess the current state of …
The big news last month was the announcement by OPEC and its allies that they would extend their output cuts until the end of 2018 rather than finishing them in March as had been planned. However, in the event, the market reaction was rather subdued as an …
4th December 2017
Commodity prices fell this week, partly owing to weaker activity data from China, which weighed on industrial metals prices. In addition, a stronger dollar put some downward pressure on precious metals prices despite a further ratcheting up of tensions …
1st December 2017
Commodity prices edged slightly higher in November on the back of a depreciation in the US dollar. Looking at the sector breakdown, most sub-sectors of the S&P GSCI moved higher. Industrial metals bucked the trend, weighed down by weak Chinese activity …
India has experienced a period of uninterrupted growth in steel production for more than a decade, unmatched by any other major producer. But the country faces challenges in creating a competitive steel industry and is unlikely to emerge as the growth …
China’s official and unofficial manufacturing PMIs continued to diverge in November, with the former rising and the latter falling. We tend to put more faith in the unofficial index which shows that growth in the economy is losing momentum. As a result, …
As expected, OPEC announced yesterday that it, together with Russia and some other non-OPEC producers, would be extending the output cuts by nine months until the end of 2018, with the possibility of a review at the group’s next meeting in June. … OPEC …
A large fall in crude stocks will have cheered OPEC before its meeting tomorrow. However, the reduction in inventories was largely due to temporary disruption to imports. What’s more, rising oil production and a sharp drop in demand for gasoline will make …
29th November 2017
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
