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Increased speculative activity appears to have been the main driver of the recent surge in the price of palladium, which reached a sixteen-year high of $910 per ounce on 9th June. However, fundamentals suggest that prices will fall back in the coming …
21st June 2017
Global oil demand was disappointing in the first quarter of this year. Indeed, this is one reason why prices have continued to fall despite OPEC and some major non-OPEC producers extending their output cuts until March 2018. However, there are signs that …
The main commodity indices have edged lower this year but the headline figures mask very diverse underlying price movements. Looking ahead, we think that the macroeconomic backdrop for commodities contains some positives, including stronger global growth, …
World Steel Association (WSA) data showed a 4.7% y/y rise in global steel production in May, down from 5.0% in April. Nonetheless, this still compares very favourably with the 0.8% increase in steel output in 2016. … Global Steel Production …
20th June 2017
According to the International Aluminium Institute, global primary aluminium output rose by 4.8% y/y last month, down from 6.4% y/y a month earlier. However, unlike in April when the growth was all in China, output picked up in all regions in May. … …
Exchange stocks generally fell over the last month. The bigger picture is that there have been sharp drawdowns in global exchange stocks of aluminium and zinc and a large build in copper inventories so far this year. Total stocks of nickel and tin are …
19th June 2017
It has been a poor week for most commodity prices. The Fed’s decision to hike interest rates on Wednesday weighed on the prices of gold and industrial metals. Oil prices continued to drop, partly due to concerns about weak US gasoline demand. Elsewhere, …
16th June 2017
The price of gold was largely unaffected by the Fed’s decision to raise its policy rate target by 25bp, to between 1.00% and 1.25%, yesterday. While many have attributed the resilience in the gold price to strong safe-haven demand, there is little …
15th June 2017
Hotter weather and faster economic growth have led to hopes that demand for coal will rise this year. However, improvements in energy efficiency and the rapid growth in renewable power mean that coal demand probably won’t benefit by as much as it would …
China’s activity data were broadly stable in May, but a slowdown in construction starts and growth in investment do not bode well for future metals demand. … China Industrial Metals Demand Monitor …
Crude inventories resumed their downward trend last week, but gasoline stocks increased on the back of low demand and high refinery output. … US Weekly Petroleum Status …
14th June 2017
It has been a dismal few weeks for commodity prices. Prices have generally fallen amid signs of somewhat slower Chinese growth and concerns about subdued growth in oil demand and still-high stocks. While we expect a more concerted drawdown of stocks to …
India is one of the world’s largest consumers of gold and relies solely on imports to meet domestic gold demand. This has, at times, resulted in a deepening of the country’s current account deficit, pressuring policymakers to find a way to reduce the …
The likelihood that China will start exporting refined tin in much larger quantities should ease the relatively tight supply picture outside China. As such, we have revised down our end-2017 price forecast. … Tightness in tin likely to …
13th June 2017
Higher production in Nigeria and Libya boosted total OPEC production last month. However, stocks continued to fall and the group revised down its expectations for non-OPEC output this year. … OPEC output …
Crude oil prices have slumped again recently, despite OPEC agreeing to extend its output cuts by nine months. This Energy Watch sets out our view on what will happen to supply and demand over the next eighteen months and what this is likely to mean for …
12th June 2017
Oil prices fell again this week on persistent concerns that the market remains oversupplied. Most metals prices also slipped, despite China’s May trade data showing robust growth in commodity imports. Meanwhile, and perhaps surprisingly, the price of gold …
9th June 2017
It now appears likely that the European economy will record the strongest growth in nearly a decade in 2017. While Europe cannot compete with China or the US in terms of the likely impact on commodities demand, this still represents a positive for prices. …
PGM output had a strong start to the year but the latest figures suggest that it has already started to wane. We expect production to fall in the remainder of the year as the platinum price treads water and mining firms close loss-making operations. … …
8th June 2017
China’s commodity import volumes bounced back in May, after a weak April. However, we doubt that this marks the beginning of a sustained recovery. Slower credit growth is expected to lead to weaker economic activity in the coming quarters, which will …
Stocks of both crude oil and gasoline unexpectedly rose last week, driven by a rebound in crude imports and a slump in demand. … US Weekly Petroleum Status …
7th June 2017
The prices of precious metals benefitted from a weaker US dollar and heightened safe-haven demand in May. In addition, markets are pricing in only a limited Fed tightening over the next eighteen months. In contrast, the prices of most industrial metals …
6th June 2017
Oil prices fell at the end of last month as OPEC disappointed markets by simply rolling over its output cuts for another nine months, rather than deepening them as well. However, this should still be enough to achieve the cartel’s aim of bringing stocks …
Oil prices have continued to fall on fears that the OPEC supply cuts will not be sufficient to clear the excess in the market. In addition, a weak May unofficial PMI reading out of China on Thursday depressed sentiment towards most industrial commodities. …
2nd June 2017
The withdrawal of the US from the Paris Agreement on climate change will not alter our forecasts of US demand for energy commodities, since the agreement was non-binding and President Trump had no intention of implementing it anyway. However, it may …
US crude stocks fell for the eighth consecutive week as demand from refineries increased and net imports fell. Gasoline stocks were also drawn down as consumption picked up. … US Weekly Petroleum Status …
1st June 2017
Despite the recent rally in prices, we remain bearish on the long-term prospects for lead usage. While increased demand for start-stop systems in cars could provide some support to prices over the coming years, we doubt it will be enough to offset lower …
With the exception of a few agriculturals, the prices of most commodities fell last month. Markets chose to shrug off the persistent weakness in the US dollar. Instead, data showing a slowdown in China’s activity recently and a weak first quarter for the …
The official and unofficial May manufacturing PMIs for China told somewhat different stories. However, we are inclined to put more weight on the unofficial PMI, which fell for the third successive month and helps to explain the recent weakness in the …
Coal prices have been supported recently by strong global economic growth. However, a slowing Chinese economy, rising supply and intense competition from cheap natural gas and renewable power mean that we still expect prices to fall over the rest of the …
31st May 2017
Chinese steel prices have been on a roller-coaster since the start of this year, as investor sentiment on the outlook for demand waxed and waned. In this Metals Watch, we take an in-depth look at the prospects for supply and demand in the Chinese steel …
30th May 2017
The big story this week was the 5% drop in the oil price on Thursday, despite the fact that OPEC extended its production cuts for nine months. It appears that investors were expecting deeper cuts. Elsewhere, agriculturals had a poor week, exacerbated by …
26th May 2017
As was widely expected, OPEC announced earlier today that it, together with Russia and some other non-OPEC producers, would be extending their output cuts by nine months, until the end of March 2018. Indeed, the meeting seems to have been relatively …
25th May 2017
The latest trade data show a jump in gold imports in the two largest consumers last month. India’s imports soared ahead of the forthcoming Goods and Services Tax (GST), while the strength of China’s imports could reflect expectations of buoyant demand. … …
Sentiment towards metals has deteriorated somewhat since the start of 2017. We had warned that this could happen as the large investor inflows into metals markets last year were mostly premised on optimism about demand, whilst China’s economic slowdown …
24th May 2017
Crude oil stocks declined by the second largest amount so far this year, in spite of an increase in net imports. Gasoline and distillate inventories also fell, as demand for petroleum products surged. … US Weekly Petroleum Status …
Donald Trump’s budget proposal is unlikely to dramatically alter the energy and oil markets, even if Congress does not significantly temper them. … What could Trump’s budget mean for energy …
23rd May 2017
World Steel Association (WSA) data showed a 5% y/y rise in global steel production in April, down from 5.7% in the first quarter. Nonetheless, output was growing strongly in all the large producing countries, with the exception of Ukraine. … Global Steel …
On the 11th May, the US Department of Agriculture (USDA) published its first projections for the 2017/18 season. In this Commodities Watch, we discuss the USDA estimates and what they mean for our grains and soybeans forecasts. … WASDE projections a mixed …
22nd May 2017
According to the International Aluminium Institute (IAI), global primary aluminium output rose by 6.4% y/y last month, up from 4.3% y/y in March. However, in month-on-month terms, production fell in all reporting regions apart from China. … Global …
Commodity markets largely shrugged off soft activity and spending data out of China this week. Indeed, speculation around the outcome of next week’s OPEC meeting kept oil prices well supported. At the same time, gold benefited from the unfolding political …
19th May 2017
Stocks generally rose over the last month, which we think is consistent with broader macroeconomic data showing a slowdown in China’s activity in April and the recent weakness in most metals prices. … Higher stocks reflect the slowdown in China’s …
Growing evidence that China’s economy is decelerating has raised concerns about the impact of softer demand on global commodity markets. While we acknowledge that China’s slowdown will be a powerful headwind for some industrial commodities, notably iron …
18th May 2017
OPEC will almost certainly extend its production cuts by another nine months at its meeting next week. This Energy Watch looks at the impact that longer cuts in production would have on the oil market and prices, before examining the likelihood of the …
China’s activity and investment data for April showed clear signs of a slowdown. Given steadily tightening monetary conditions and less fiscal stimulus, we expect activity to slow further which will weigh on metals demand and prices. … China Industrial …
US crude oil stocks fell for the sixth consecutive week as demand from refineries picked up. Inventories of gasoline and diesel also fell, despite demand remaining weak. … US Weekly Petroleum Status …
17th May 2017
It has been a torrid few weeks in global commodity markets, for the most part characterised by investor selling. Signs that China’s economy slowed abruptly in April weighed on the prices of most of the more industrial commodities. That said, the oil price …
16th May 2017
An extension of OPEC’s output cuts until the end of March 2018 should be more than enough to bring stocks down to their five-year average and push prices up, even if US output continues to pick up and OPEC’s compliance slips a bit. … Longer OPEC …
15th May 2017
Given our outlook for US monetary policy this year and next, we expect the weakness in the price of platinum to persist through most of 2017-18. However, further ahead, we think that platinum will regain its lustre. … Platinum: Short-term pain, Long-term …
Commodity prices traded in a relatively narrow range this week, despite M. Macron’s decisive win in the French Presidential election, weak commodity trade data out of China, a drop in US oil stocks and the publication of the US Department of Agriculture’s …
12th May 2017
