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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
Continued weakness in Venezuela’s oil output this year should help the market to rebalance. In fact, the potential for further reductions in production represents an upside risk to prices. … How will the crisis in Venezuela affect oil …
11th May 2017
OPEC’s production was relatively flat in April, but the group significantly increased its forecast of non-OPEC output this year again. Whilst this should not prevent the group from rolling over its output reductions until the end of the year, it lessens …
South Africa’s PGM output grew strongly in Q1 but, going forward, we expect reduced investment over the past few years to start denting supply. … South Africa’s Mine Production …
Crude oil stocks declined by the largest amount so far this year, in spite of increasing US oil production. Gasoline and distillate inventories also fell, as demand for petroleum products continued to pick up. … US Weekly Petroleum Status …
10th May 2017
The price of palm oil has been falling so far in 2017, in tandem with most other agricultural commodities. In this Commodities Watch, we will discuss whether the recent price weakness is justified by demand and supply fundamentals and the outlook for …
We expect growth in US gasoline demand to pick up over the rest of the year as employment and wages rise. What’s more, a trend towards purchases of used cars and light trucks should offset reductions in consumption due to fuel efficiency. … US gasoline …
9th May 2017
The resilience in the price of gold this year has come as a surprise given the prospect of further monetary tightening in the US. Safe-haven demand appears to have been the main driver of prices. But, there are already signs that this support is fading. …
8th May 2017
China’s commodity import volumes dropped back in April, with a notable downturn in the more industrial commodities. Volumes are likely to remain volatile in the coming months, but the prospect of cooling domestic demand points to further weakness ahead. … …
The prices of oil, iron ore and many of the industrial metals plunged this week. Investor concerns about demand resurfaced as China’s manufacturing PMIs for April pointed to slower economic activity. Persistently high global stocks were an additional …
5th May 2017
Geopolitical tensions were the main driver of oil prices in the first half of the month as the US fired missiles at Syria and ramped up rhetoric around North Korea. However, the market quickly refocused its attention on the prospects for an extension of …
Global gold demand fell by 18% y/y in Q1 2017, but this was from a high base a year earlier. In comparison to Q4 2016, demand was stronger as geopolitical concerns prompted investor buying. Subdued demand elsewhere, and the prospect for the Fed hiking …
The recent weakness in oil prices is largely due to concerns over persistently high US stocks and growing production there. However, the headline US crude stocks number is a little misleading and US production growth should slow over the rest of the year. …
The prices of both industrial and precious metals suffered last month from waning investor optimism about the outlook for demand. Indeed, concerns appeared justified as China’s manufacturing PMI dropped sharply in April and it became clear that the US …
3rd May 2017
A sharp fall in the amount of oil in the US Strategic Petroleum Reserves (SPR) prevented commercial stocks from falling by as much as expected. … US Weekly Petroleum Status …
The prices of many commodities had a volatile month, led by the price of oil which is being buffeted by a lack of clarity on future supply. Industrial metals prices fell sharply on renewed concerns about the outlook for growth in China. At the same time, …
2nd May 2017
Both the official and unofficial April manufacturing PMIs for China surprised on the downside. There are now clear signs of cooling domestic demand, which will weigh on commodity demand. That said, activity in the construction sector is holding up well, …
This week has been dominated by speculation about whether OPEC will extend its output cuts at its next semi-annual meeting at the end of May. Even though an extension now appears likely, this failed to support the oil price, which has slipped back. A …
28th April 2017
The prices of many commodities have come off the boil recently on fading optimism about demand, rising geopolitical risk and the prospect of further US monetary tightening and dollar appreciation. Of course, there were some exceptions: the prices of both …
26th April 2017
Crude oil stocks slumped for the third consecutive week as demand from refineries rose to its highest level on record. Meanwhile, both gasoline and distillate inventories increased sharply. … US Weekly Petroleum Status …
China’s trade data for March depict a relatively weak picture for metals demand. While in some cases imports picked up in the first quarter, we think that optimism about demand rather than strong underlying usage has been the main driver of the recovery. …
25th April 2017
The latest trade data show a sharp rise in gold imports in China and India in March. While demand in India picked up ahead of the Akshaya Tritiya festival, Chinese buyers probably took advantage of lower prices. … China and India’s gold imports …
