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Most commodity prices took a bit of a hit this morning as China raised its short-term interest rate, in a clear sign that supporting growth is no longer the primary immediate goal of policymakers. Indeed, the manufacturing PMIs for January dipped, …
3rd February 2017
The prices of most metals rose last month (see Chart), buoyed by ongoing investor buying and expectations of strong demand in China and the US. The decision by the Fed to keep rates on hold in January, coupled with the uncertainty around President Trump’s …
Demand for gold in the two main consumers – China and India – plummeted in 2016 on a combination of higher prices, increased regulation in India and lower appetite for gold jewellery in China. Looking forward, we expect overall demand to remain subdued …
After finishing 2016 on a high, oil prices were relatively stable in January as investors were waiting to see whether OPEC is complying with its deal to cut output. Elsewhere, a jump in economic activity in China at the end of last year was not enough to …
2nd February 2017
There have been some large moves in stocks, notably in Shanghai, over the last month. Stockbuilding was evident in China which may have been a symptom of weak demand, but we think it is more likely to be a reflection of optimism about future demand. … …
Inventories of both crude oil and gasoline rose by more than expected last week. But the focus remains on OPEC. … US Weekly Petroleum Status …
1st February 2017
Commodity prices were remarkably stable in January, considering the flurry of executive orders by the new US president, Donald Trump. Data showing that China ended 2016 on a strong note was a key factor supporting the more industrial commodities. …
For the most part, the prices of agricultural commodities in US dollar terms rose in 2016, owing to a combination of weather-related supply disruptions, rising oil prices and some weakness in the US dollar. In this Commodities Watch, we will briefly …
31st January 2017
There are a number of risks which could see oil prices slump back below $40 per barrel in the first half of this year. However, our central forecast is that the prices of Brent and WTI will dip a little over the next few months, before rebounding to $60 …
While we had always been positive on the outlook for metals in 2016, even we were surprised by the scale of the rally. Indeed, we are now concerned that the prevailing optimism about demand for industrial metals could prove unfounded. At the same time, we …
30th January 2017
The prices of the more industrial commodities generally fared better this week, with a few notable exceptions in nickel and palladium. Optimism about demand continues to support prices. Indeed, this was even evident in agriculturals, with lumber and …
27th January 2017
For the most part, commodity prices have started the year strongly, buoyed by persistent optimism about demand and some weakness in the US dollar. However, we are concerned that, in some cases, prices may have got ahead of underlying fundamentals. … …
26th January 2017
After a weak start to the year, global steel production recovered and was growing briskly at 5.5% y/y in December, encouraged by high prevailing prices. In our view, the steel market is more than comfortably supplied, which suggests prices could fall back …
25th January 2017
Inventories of both crude oil and gasoline grew last month as demand for both fuels remained weak. … US Weekly Petroleum Status Report …
Coal was one of the best performing commodities in 2016 after years of declining prices. However, this revival was primarily due to reductions in supply coupled with cold weather, which boosted demand. This Energy Watch looks at the outlook for supply of …
China’s refinery output continued to grow in December, encouraged by higher prices and signs of a more general revival in the economy. However, we think optimism about demand will fade over the course of the year and that we may be a near a peak in …
24th January 2017
According to the International Aluminium Institute (IAI), global primary aluminium output rose by 7.8% y/y last month, up from 3% y/y in November, led by a whopping 14.2% y/y jump in China’s production. … Global Aluminium Production (Dec. & …
23rd January 2017
The pattern of China’s trade in industrial metals and ores in 2016 was determined in part by trends in global mine supply. Lower mine output of some ores was a factor curbing imports, but higher US dollar prices may also have been weighing on demand in …
The prices of most commodities eased back this week. Agricultural commodities fared slightly better, primarily on the back of weather-related concerns about supply. Data released on Friday confirming somewhat stronger GDP growth in China in the fourth …
20th January 2017
China’s activity data for December show the economy finishing the year on a strong note. That said, there were signs of somewhat slower growth in output last month and the downturn in state-led infrastructure spending is a particular cause for concern. … …
Despite a slowdown in economic growth in China from its high at the end of 2016, we expect the country’s oil demand to rise this year. … Higher Chinese oil demand to help rebalance the …
Inventories of both oil and gasoline rose last week as demand slumped. Gasoline demand has been negatively impacted by higher prices and colder weather. … US Weekly Petroleum Status …
19th January 2017
OPEC oil production fell last month, but this was partly due to temporary disruptions in Nigeria. Meanwhile, the group expects non-OPEC output to increase this year. … Nigeria and Saudi Arabia pull OPEC output …
18th January 2017
After slumping in the days following Trump’s win, the price of gold has since recovered some ground and is now trading at around $1,200 per ounce. However, we think that risks are now skewed to the downside and that prices might fall back this year. … How …
South Africa’s overall mine production remained subdued in November, with all metals seeing a drop in output. The PGM market appears finally to be tightening but we think that it will take some time for prices to respond, owing to high stocks. … South …
17th January 2017
After a quiet start to 2016, commodity markets have sprung into life. Late in the week, comments by OPEC members that they would deepen output cuts and possibly extend them until the end of 2017 reversed earlier falls in the oil price. In contrast, nickel …
13th January 2017
China’s commodity import volumes remained high in December, corroborating data showing a pick-up in activity in the final months of 2016. However, the strength of imports cannot be attributed solely to demand. In some cases, import volumes rose in 2016 …
The latest data show that central banks’ holdings of gold were broadly unchanged in November. However, year-to-date purchases remain substantially lower than in 2015 and this weakness could persist through 2017. The pace of the official sector’s purchases …
12th January 2017
US crude stocks swelled last week as production and imports surged. Gasoline stocks also grew as refinery runs increased, but demand remained subdued. … US Weekly Petroleum Status …
11th January 2017
It has been a quiet start to 2017 in commodity markets. Investors appear to be taking a wait-and-see approach, ahead of the inauguration of President-elect Trump and more clarity on his policy objectives. After weakening earlier in the week, the US dollar …
6th January 2017
US crude inventories plummeted last week as imports slumped. In contrast, gasoline stocks surged as demand waned. … US Weekly Petroleum Status …
5th January 2017
Oil prices finished 2016 on a high as OPEC and some major non-OPEC producers agreed to cut production in the first half of this year. However, prices have already eased back in the first few days of 2017 as investors become increasingly wary that the …
The prices of most metals rose last year, but industrial metals substantially outperformed precious. While we had always been positive on the outlook for metals in 2016, even we were surprised by the scale of the rally. Indeed, we are now concerned that …
The prices of many commodities slipped back in December, despite the rise in the oil price and encouraging economic data out of China. While the falls in industrial metals may have been the result of investor profit-taking, the prices of some agricultural …
3rd January 2017
The prospect of reduced mine supply from the Philippines was a key driver of the rally in nickel prices in the second half of 2016. However, the price of nickel still underperformed its base metal peers and it fell back sharply in the final weeks of last …
Prices have drifted a bit this week, ahead of the Christmas and New Year holiday period. However, the bigger picture is that the prices of most industrial commodities are ending the year significantly higher. This is perhaps somewhat surprising given the …
22nd December 2016
Commodity prices face a number of headwinds moving into next year, including rising US interest rates, further US dollar strength and less stimulus spending by the Chinese authorities. However, we expect strong growth in demand to bolster oil prices, …
21st December 2016
Stronger demand should help to boost US natural gas prices next year. But an increase in supply and high stocks will limit the increase. … US natural gas prices to rise next …
20th December 2016
According to the International Aluminium Institute (IAI), global primary aluminium output rose by 2.9% y/y last month, up from 1.5% y/y in October, as India, Russia and China continued to expand output. … Global Aluminium Production …
The response of commodity prices to Wednesday’s US rate hike was relatively muted as the move had been widely anticipated. Predictably, precious metals, notably gold, fell on the news but further downside should be limited unless real bond yields continue …
16th December 2016
OPEC has managed to confound its sceptics (including us) by masterminding an agreement between OPEC and non-OPEC countries to cut output substantially next year. This Energy Watch looks at the potential impact on supply next year and what this might mean …
Aside from a 14% m/m jump in copper inventories, there haven’t been any big changes in stocks over the past month. However, the year-to-date picture is more mixed, with the aluminium, tin and zinc markets now looking substantially tighter than a year ago. …
15th December 2016
Yesterday’s US rate hike was widely anticipated, which probably explains the relatively muted responses in commodity markets. We expect the Fed to accelerate the pace of tightening in 2017, which would represent a headwind for commodity prices, notably …
US oil stocks fell last week as imports dropped. But production grew again, highlighting the risk that output cuts by OPEC and the resulting increase in prices will simply encourage more non-OPEC production. … US Weekly Petroleum Status …
14th December 2016
China’s activity data for November painted a positive picture for metals demand. However, there are signs of a slowdown in the all-important construction sector which, coupled with official efforts to curb credit growth, point to weaker activity in the …
Further increases in output from Libya and Nigeria will make it more difficult for OPEC to reach their output quota of 32.5m bpd. … Angola, Libya and Nigeria push OPEC’s output …
The price of oil rose sharply as oil producers surpassed market expectations by agreeing to cut supply by 1.8m barrels a day from January. Meanwhile, industrial metals prices rose further as investors remain optimistic about the outlook for demand. In …
13th December 2016
The prices of most industrial metals surged this week, largely due to increased investor interest. Strong China’s imports in November and the prospect of fiscal stimulus in the US further buoyed prices. In contrast, oil prices fell back a bit as the …
9th December 2016
Platinum has substantially underperformed its sister metals – palladium and rhodium – this year as its higher correlation with gold has seen its price fall sharply since the US presidential election. Looking forward, we only see limited upside for prices …
OPEC’s confirmation that it would cut production next year in an attempt to reduce the surplus in the market caused oil prices to surge at the end of November. The surprise victory for Donald Trump in the US Presidential election at the start of the month …
8th December 2016
