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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
A slump in PGM output drove South Africa’s total mine production lower in October, after tentative signs of a recovery in September. While this is not good news for South Africa’s economy, it is exactly what it’s needed in the PGM sector where abundant …
China’s commodity import volumes jumped in November, despite markedly higher US dollar prices and a weaker renminbi. Trends in activity suggest that import demand will remain robust in the near-term, but it could fade thereafter as the impact of earlier …
Oil stocks fell last week despite a large rebound in net imports. However, gasoline stocks surged as output from refineries increased and demand dropped. … US Weekly Petroleum Status …
7th December 2016
Investors have been encouraged by stronger economic data out of China and the prospect of fiscal stimulus in the US and have significantly increased their exposure to industrial metals. Conversely, gold has suffered from waning self-haven demand. However, …
6th December 2016
October’s rise in retail sales and November’s decent euro-zone PMIs are consistent with an acceleration of GDP growth in Q4. But with Italy’s “No” vote heightening political risks, the prospects for growth in 2017 are weaker. … Robust supply to weigh on …
5th December 2016
Oil prices surged this week as OPEC surpassed expectations by confirming production cuts and announcing quotas for member countries. Given OPEC’s poor record on compliance, we are sceptical that the deal will result in materially lower supply in 2017. …
2nd December 2016
The performances of the three main platinum group metals (PGMs) – platinum, palladium and rhodium – have diverged sharply over the past few months. Palladium has seen the biggest gains in the year-to-date, rising by 35%. While the market will remain in …
Following the victory for Donald Trump in the US presidential election, commodity markets chose to focus on his promise of a large fiscal stimulus, including a substantial increase in infrastructure spending. This boosted the prices of industrial metals, …
1st December 2016
Over the past year, zinc prices have rallied strongly, reaching a nine-year high recently, on the back of mine closures and production cuts. While the refined market will continue to tighten through 2017, we think that the rally in prices will start to …
30th November 2016
OPEC’s agreement to cut production by 1.2m bpd, in line with the provisional deal made in Algiers at the end of September, was more ambitious than the market (and we) had expected. However, the focus will now turn to whether the group can deliver on its …
Lower net imports of crude oil appeared to be the main driver of the draw on crude oil inventories as demand from refineries actually fell last week. … US Weekly Petroleum Status …
It has been a quiet month for stock movements, with the exception of copper. However, the drop in LME copper stocks and surge in Shanghai inventories can be largely explained by price arbitrage opportunities rather than by underlying demand trends. More …
29th November 2016
Oil prices have been buffeted over the last week by hopes and concerns about the outcome of tomorrow’s OPEC meeting, but we still think that the group will manage to reach a face-saving deal. … OPEC deal looks even more …
The prices of industrial metals surged again this week, in large part due to investor buying. In contrast, the price of gold fell further as the dollar appreciated and the minutes of the November FOMC meeting pointed strongly to a US rate hike in …
25th November 2016
China’s metals imports remained subdued in October as higher dollar prices and some further depreciation of the renminbi weighed on volumes. … Weakness in China’s metals imports could prove …
The focus of oil markets over the last few months has been squarely on the potential for OPEC to cut supply. However, growth in demand will have just as big an impact on oil prices over the next year as all but the most ambitious OPEC production …
24th November 2016
The latest import data out of China and India show a mixed picture for gold demand in the two largest consumers. China’s appetite for the metal appears to have faltered in recent months. In contrast, the measures introduced by the Indian government in …
A slump in net imports of crude oil and another jump in demand from refineries helped to drag down crude inventories last week. … US Weekly Petroleum Status …
23rd November 2016
World Steel Association (WSA) data, released this afternoon, show a 3.3% y/y rise in global steel output in October, as higher Asian output more than offset lower production at US steelmakers. After a weak start to the year, global production has …
21st November 2016
China’s refinery output continued to grow in October, bolstered by rising prices. However, we think producers are overestimating demand, in which case production could fall back in coming months. … China Industrial Metals Output Monitor …
According to the International Aluminium Institute (IAI), global primary aluminium output rose by 1.5% y/y in October, boosted by higher y/y production in India, China and Russia. … Global Aluminium Production …
After last week’s wild swings, the prices of most commodities stabilised this week. That said, positive comments from OPEC and Russian officials on the prospects for output cuts gave oil prices a boost early in the week. What’s more, the US dollar jumped …
18th November 2016
OPEC’s next official meeting on 30th November is being viewed by the markets as a make-or-break opportunity. A strong, credible deal to cap supply could put a floor under prices and help to rebalance the market. In contrast, if the group fails to agree on …
17th November 2016
Industrial metals prices were already rising ahead of Donald Trump’s election to the US Presidency, but his victory appeared to provide new grounds for optimism as markets focussed on his plans for fiscal stimulus, in particular infrastructure spending. …
A recovery in net imports of crude oil helped to fill stocks last week, whilst higher output from refineries boosted inventories of petroleum products. … US Weekly Petroleum Status …
16th November 2016
Right now the decision to nudge up our forecasts for the gold price in the wake of Donald Trump’s shock victory in the US presidential election may not look like a smart one. Indeed, the price of the precious metal could fall further if (a big if) the …
The prices of industrial metals have risen strongly in the last month on optimism about demand and a surge in investor buying. In contrast, sentiment has turned negative in the oil market as investors became increasingly sceptical about OPEC’s ability to …
15th November 2016
China’s industrial production held steady in October, but metals-intensive sectors continued to do well and there was a sharp rebound in construction starts. That said, our analysis suggests that the growth in China’s end-user demand alone is not nearly …
14th November 2016
Although the prices of industrial commodities initially plunged and gold rose on the news of Donald Trump’s victory in the US election, sentiment reversed very quickly as the President-elect Trump made a conciliatory acceptance speech. Indeed, the prices …
11th November 2016
Another rise in OPEC’s oil output in October underlines how difficult it will be for the group to agree on meaningful cuts at the end of the month, especially as US oil production is also rising. In the near-term this will have a bigger impact on oil …
Markets appear to believe that a Trump victory will lead to major infrastructure spending and much more aggressive Fed tightening. As a result, gold prices have fallen. While some fiscal stimulus is likely, we don’t think that it will be all negative for …
Commodity markets seem to believe US President-elect Trump will quickly deliver the one thing that he probably can’t – a surge in infrastructure spending – and are ignoring all the bad stuff that perhaps he can. Trump’s promises are, in any event, small …
Commodity markets shrugged off the surprise victory for Donald Trump in the US Presidential election with the initial falls in oil prices already being reversed, helped by (probably misplaced) optimism that he will be able to push a substantial fiscal …
South Africa’s total mine production rebounded in September, led by a sharp increase in PGM output on the back of higher prices. With inventories still abundant and the risk of labour disruptions substantially lower, the recent correction in prices …
10th November 2016
Yesterday, the US dollar price of copper shrugged off the uncertainty created by the surprise victory for Donald Trump in the US Presidential election and rose by another 3%. But while the fundamentals are looking somewhat more supportive, the recent …
A dramatic increase in US oil production last week helped boost stocks. However, the return of refineries from maintenance absorbed some of the extra supply. … US Weekly Petroleum Status …
9th November 2016
The surprise victory for Donald Trump in the US Presidential election is likely to lead to greater safe-haven demand over the next few months, with gold a clear winner. While heightened risk aversion could be negative for industrial commodities, it is …
The recent slump in the US dollar price of cocoa reflects the widespread view that output is going to bounce back in 2016/17. In this Commodities Watch, we analyse the outlook for demand and supply of cocoa and what this means for prices. … Cocoa prices …
8th November 2016
In its Q3 Global Demand Trends report, published today, the World Gold Council (WGC) described a pretty gloomy picture for gold demand. Investment was the only exception, as the economic and political uncertainty following the UK’s referendum to leave the …
