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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
Despite a stronger US dollar, the S&P GSCI commodity index trended higher. With the exception of agriculture, all the other sub-indices recorded gains. … Commodities defy stronger …
Total exchange stocks of nearly all the metals edged lower over the last month, which will have been a factor supporting prices. That said, the recent stock drawdowns have been relatively small. What’s more, the price of copper has surged, despite the …
17th October 2017
President Trump’s refusal to waive sanctions on Iran’s oil industry has given a boost to oil prices, but it is not a given that Congress will reinstate sanctions and support from international partners is unlikely. … Iran’s oil exports unlikely to fall …
16th October 2017
The more industrial commodities have had a good week, which was vindicated to some extent on Friday by data showing a surge in China’s commodity imports in September. Meanwhile, the minutes from the Fed’s FOMC meeting, published on Wednesday, seemed to …
13th October 2017
The US Department of Agriculture (USDA)’s latest set of estimates painted a more mixed picture this month. While the report was perceived as bearish for wheat and cotton, soybeans and corn rallied on downward revisions to ending stocks. That said, the …
China’s commodity import volumes surged in September. However, this could reflect a final push at the local level to boost activity ahead of the Party Congress this month. As such, import volumes appear likely to tail off in the coming months as local …
Last week’s reduction in US crude stocks was mainly owing to lower production and a recovery in refinery inputs. Stocks are likely to continue to fall over the next few weeks as demand gains momentum. … US Weekly Petroleum Status …
12th October 2017
For the most part, 2017 will be a year to forget for agricultural commodities as abundant supply weighed on prices. In this Commodities Watch, we will take stock of the latest developments in agricultural markets and assess the likely direction of prices …
Temporary supply disruptions and strong demand in Asia have boosted LNG prices to an almost 9-month high. However, the rally may soon lose momentum as winter demand looks set to peak at a time of booming supply. We expect prices to trend downwards in 2018 …
11th October 2017
OPEC production rose last month due to increases in Libya and Nigeria. However, estimates of slower non-OPEC output growth and stronger demand offer some hope for rebalancing. … Oil market showing more signs of …
The Indian government’s decision to reverse an order that brought the gem & jewellery sector under anti-money laundering legislation is certainly good news for the gold industry. That said, demand is unlikely to be as strong as in previous years since …
10th October 2017
The collapse in US net oil imports over the last few weeks has helped to draw down crude inventories in the country. This has raised hopes that market rebalancing is accelerating and has been one reason for the recent rise in oil prices. However, the …
9th October 2017
The jump in alumina prices is probably premised largely on the prospect of winter capacity closures in China. But given that aluminium production could also fall, the market may not be as tight as it seems. … Does the rally in alumina prices have …
It was a relatively quiet week on the news front, at least until the US labour data on Friday. The 33,000 drop in non-farm payrolls came as a surprise, even though markets had expected hurricane-related distortions to the data. We think employment will …
6th October 2017
Vehicles are a growing source of demand for metals, including platinum group metals (PGMs), zinc, aluminium, steel, nickel and copper. In this Metals Watch we look at the latest trends in global auto sales and see what they can tell us about the strength …
If President Trump refuses to waive the sanctions on Iran’s oil exports then we would expect oil prices to rise. However, it is not clear that Congress would vote to re-impose sanctions on the country and, in any case, sanctions are unlikely to be as …
The prices of most metals fell in September as a rising US dollar and upward revisions to expectations of US interest rate hikes weighed on investor sentiment. Signs of somewhat softer economic activity in China also raised concerns in the more industrial …
5th October 2017
A surge in exports to the highest level on record last week helped to draw down crude stocks. We expect exports to remain high while the Brent-WTI spread is wide which should help to reduce stocks further. … US Weekly Petroleum Status …
4th October 2017
The rallies in the prices of coal and oil look like they may have run out of steam in the last week. The prices of both had been boosted by stronger demand and supply disruptions. However, global production of coal is rising rapidly and US oil output has …
Oil prices surged in September, which in turn boosted the prices of agriculturals. In contrast, concerns about demand and dollar appreciation weighed on metals prices. Looking ahead, the price of oil could ease back as supply remains ample for now, while …
2nd October 2017
China’s official and unofficial PMIs diverged in September, but both suggested that smaller, private sector manufacturers are struggling. The authorities appear aware of the sector’s woes as the cut in the reserve requirement ratio, announced over the …
There were some sharp moves in metals prices this week, as investors took positions ahead of the weeklong holiday in China. Meanwhile, oil prices edged higher on speculation that OPEC will extend its output cuts beyond March 2018. However, higher US …
29th September 2017
Palladium was in the spotlight yesterday as its price traded at a premium to platinum for the first time in sixteen years. However, unlike platinum, investors’ net-long position in palladium looks stretched and there is a risk that prices might fall …
The last three months have seen a turnaround in the oil market as investor sentiment turned positive and prices jumped. This Energy Watch will briefly take stock of what has been driving prices up recently before examining what is likely to happen to …
Global oil demand was given a boost in the second quarter of this year largely due to a stronger global economy. The latest data point to a bright outlook for oil demand over the next year as the global economy continues to expand. This should help to …
28th September 2017
A surge in exports and demand from refineries last week helped to draw down crude stocks. We expect these trends to continue which should help to narrow the Brent-WTI spread over the next few weeks. … US Weekly Petroleum Status …
27th September 2017
The latest trade data for India and China show that imports remained soft in August. We had always believed that demand in India would weaken in Q3 as a result of the implementation of the Goods & Services Tax (GST). In China, we expect imports to pick up …
26th September 2017
Much of the focus this week was on the outcome of the Fed’s FOMC meeting. In the event, it seems that a clear majority of Fed officials continue to expect another rate hike in 2017. This was a factor weighing on all the metals prices this week, but gold …
22nd September 2017
The recovery in the Baltic Dry Index (BDI) since early 2016 corroborates data showing a pick-up in global growth and the strength of commodity prices, notably the metals. However, we think that the BDI adds little to what we already know about global …
21st September 2017
World Steel Association (WSA) data showed a 4.9% y/y increase in global steel production in January-August, with output rising in all the major producers except Japan. That said, global output was down slightly on a month-on-month basis. … Global Steel …
Last week’s increase in US crude stocks is mainly due to the lingering impact of Hurricane Harvey. Demand for petroleum products remains reasonably strong, which should help the market rebalance. … US Weekly Petroleum Status …
20th September 2017
According to the International Aluminium Institute (IAI), global primary aluminium output declined by 1.3% y/y last month. This compares with a 1% y/y increase a month earlier. Nonetheless, production is still up by 5.2% y/y year-to-date, suggesting that …
China increased its output of most refined metals in the first eight months of the year. The main exceptions were zinc and nickel. … China Metal Output …
A new, yuan-denominated crude futures contract should have no impact on oil prices. The development of more futures contracts makes sense given China’s high consumption of most major commodities and will especially appeal to consumers who want to avoid …
19th September 2017
We are revising our coal price forecast up to take account of the recent rise in prices. However, increasing supply, slowing Chinese demand and more efficient energy alternatives are all likely to weigh on the price of coal over the coming year. … Should …
There has been a dramatic drawdown of Shanghai lead inventories in the last month and a surge in LME copper stocks in the last week. Otherwise, total stock movements have been relatively subdued, with small rises for aluminium, tin and zinc, while copper …
18th September 2017
There were some big gains this week in some of the agricultural commodities, primarily as a result of supply concerns. In contrast, weak Chinese August activity and spending data weighed on the prices of the base metals. In fact, both industrial and …
15th September 2017
Sentiment towards metals remained broadly positive in Q3 as the prospect of capacity cuts in China later in the year supported industrial metals prices whilst heightened geopolitical risks buoyed demand for safe havens – notably gold. That said, we think …
China’s August activity and spending data suggest that the slowdown that started in July continued into August. In particular, a downturn in infrastructure spending does not bode well for metals demand. We expect the economy to continue to cool in coming …
14th September 2017
