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South Africa’s total mine production continued to fall in August, but PGM output recovered as miners took advantage of higher prices. Looking ahead, we think there is a risk of supply disruptions in the PGM sector in the coming weeks since the wage …
21st September 2016
A stronger dollar, a reduction in risk appetite and a scaling back of expectations that oil producers will actually limit output made it a tough month for most commodities. However, the price of gold was actually quite resilient in the face of rising US …
20th September 2016
Detailed Chinese industrial production figures for August paint a mixed picture of refining activity. While refined copper production was growing strongly, there were sharp downturns in tin and nickel output. However, we think this reflects diverging …
According to the International Aluminium Institute (IAI), global primary aluminium output fell by 0.2% y/y in August. So far this year, output in the World ex China has risen, while China’s production has declined. However, August’s data suggest that this …
Supply of the main grains and soybeans looks set to rise in 2016/17, after adverse weather –notably in Latin America – dented harvests in 2015/16. That said, many analysts suspect that the United States Department of Agriculture (USDA) production …
19th September 2016
The price of oil has taken a hit this week as hopes faded of an OPEC-led agreement between producers to freeze output. However, other industrial commodities performed somewhat better, buoyed by the release on Tuesday of stronger-than-expected Chinese …
16th September 2016
We think that concerns about the lack of spare capacity in the oil market are overdone as supply is already ample and stocks are high. However, as the market tightens over the next few years, low amounts of spare capacity may become more worrying. … …
15th September 2016
The ongoing surge in LME copper stocks was the key development last month and contributed to renewed bearish sentiment towards the metal. In contrast, stocks of all the other metals have fallen over the past four weeks. … Rising stocks weigh on copper …
US inventories of crude oil fell last week as imports rebounded by less than expected after the previous week’s hurricane-related disruptions. On the other hand, stocks of gasoline and distillates rose, despite output from refineries falling. … US Weekly …
14th September 2016
Iron ore prices have been on a bit of a rollercoaster this year, rising on waves of optimism about China’s demand, before slipping back on persistent growth in supply. In this Metals Watch, we argue that the price of iron ore will struggle to make …
Metals prices received a boost today as August activity data out of China surprised on the upside. There is now clear evidence that the monetary and fiscal stimulus enacted earlier in the year is translating into a pick-up in industrial activity. This …
13th September 2016
Speculation about a potential deal to freeze output at the unofficial OPEC meeting at the end of September has been largely responsible for the increase in oil prices over the past month. This Energy Watch looks at the chances of reaching a deal, what an …
OPEC production remained at near-record highs in August. What’s more, the group revised up its estimate of non-OPEC output for both this year and next. … OPEC pushes back market …
12th September 2016
Since 2010 central banks have become major buyers of gold, accounting on average for about 10% of total gold demand over the past five years. However, demand from the official sector has been lacklustre so far in 2016, prompting some commentators to …
The price of oil has alternately surged and plunged this week, buffeted by a sharp (but probably temporary) fall in US stocks and speculation about prospects for supply. Indeed, stability in prices could remain elusive, at least until the OPEC meeting at …
9th September 2016
US crude stocks fell by the second largest amount on record last week. However, this was almost entirely due to a drop in imports which may rebound next week. … US Weekly Petroleum Status Report (8th Sep. …
8th September 2016
South Africa’s overall mine production remained subdued in July, dragged down by yet another fall in PGM output. However, the profitability of the PGM industry has continued to improve owing to higher prices. Looking ahead, with wage negotiations having …
After a slowdown in July, growth in China’s commodity import volumes rebounded in August. This was perhaps to be expected as July activity indicators were encouraging and the unofficial manufacturing PMI remained high in August. … China’s commodity …
The prices of both robusta and arabica coffee are now at close to 18-month highs, as a result of weather-related crop damage, concerns about future supply and falling export volumes. However, if supply surprises on the upside, prices could drop sharply as …
7th September 2016
The silver price has surged this year, together with gold, bolstered by investor demand especially in the wake of the UK Brexit vote. Although prices might give up some of their recent gains when Fed tightening resumes, a recovery in industrial demand …
A stronger US dollar on the back of renewed expectations that the Fed will hike rates by the end of the year weighed on the prices of most industrial and precious metals last month. The only metals bucking the trend in August were those with clearly …
5th September 2016
The statement by Russia and Saudi Arabia earlier today that the two countries have agreed to work together to try to stabilise the oil market did very little to justify the almost 6% surge in oil prices this morning. Indeed, prices have already given back …
A weaker-than-expected US employment report on Friday all but removed the prospect of a US interest rate rise this month, although we still think a hike is likely before the end of the year. The subsequent dip in the dollar did, however, lend support to …
2nd September 2016
The gyrations in oil prices in response to the EIA’s weekly petroleum status report are rarely justified, since the biggest determinant of weekly changes in US stocks is variations in net crude imports, which are extremely volatile. This makes it …
The prices of most commodities retreated in late August as the dollar strengthened on the back of renewed expectations that the Fed will raise rates this year. That said, activity data out of China have been more promising recently, pointing to somewhat …
1st September 2016
The prices of most metals fell last month, undermined by some strengthening of the US dollar as a result of renewed expectations that the Fed will raise interest rates sooner rather than later. The metals markets largely shrugged off encouraging PMI and …
US distillate fuel and crude oil inventories rose again last week, the latter increase owing to higher net imports and an easing back of refiner demand. … US Weekly Petroleum Status Report - (31st Aug. …
31st August 2016
The possibility of a new deal between OPEC and some major non-OPEC oil producers to limit supply in September has seen the oil price surge by about 20% this month. However, prices have already started to fall back as some OPEC members warn it will be …
The big news in the last month has been a sharp move up in exchange stocks of copper and a renewed slump in tin inventories. However, the bigger picture is that exchange stocks of metals have not moved by much this year. The main exception is stocks of …
The zinc market has tightened sharply this year mostly owing to mine closures and production cutbacks. While we expect the market to move deeper into deficit next year, we think that there is an increasing risk that higher prices might bring some …
30th August 2016
Hawkish comments by some Fed officials and a slight strengthening of the US dollar ahead of Janet Yellen’s speech at Jackson Hole on Friday weighed on the prices of most commodities over the past week. However, while the Fed Chair added her voice to those …
26th August 2016
Oil prices are now back at around $50 per barrel (for Brent) but they have been volatile over the last few months. Speculation about a deal to freeze output, high stocks and outages in production have all been recent drivers of price movements. This …
25th August 2016
China’s gold imports resumed their upward trend last month. In contrast, India’s demand remained subdued and this weakness probably has persisted through August. That said, we expect demand from India to recover somewhat in the remainder of the year due …
Some have argued that a new trade deal between the EU and Indonesia may arrest the decline in the latter’s exports of tin. However, structural issues constraining tin exports mean that it is unlikely that any agreement would provide much of a boost to …
US crude oil and gasoline inventories rose last week, despite demand remaining relatively strong and production falling. … US Weekly Petroleum Status Report (24th Aug. …
24th August 2016
China’s metals imports fell last month. This was not totally unexpected as the strength of imports earlier in the year had seemed at odds with relatively subdued underlying demand. Higher prices for some metals may also have deterred buying. … China’s …
The recent rally in the oil price has been fuelled by speculation that output will be curtailed and, as such, may lose steam if no deal is forthcoming. Meanwhile, the combination of a somewhat weaker US dollar, greater investor risk appetite and the surge …
23rd August 2016
World Steel Association (WSA) data, released this afternoon, show a 1.4% y/y rise in global steel output in July as higher Asian output more than offset lower production at EU and US steelmakers. That said, global output in the first seven months of 2016 …
22nd August 2016
According to the International Aluminium Institute, global primary aluminium output declined by 0.5% y/y last month. However, Chinese production may have been disrupted by flooding, while output elsewhere in the world rose in July. … Global Aluminium …
With a few exceptions, commodity prices have trended higher over the past week. A weaker dollar on the back of the July FOMC minutes showing that Fed officials were divided over the timing of the next rate hike was the main factor behind the rise in …
19th August 2016
Detailed Chinese industrial production figures for July show how mine supply can offset price movements in determining refined production. The ability of smelters to respond to the rallies in zinc and nickel prices is limited by difficulties in sourcing …
The recent rally in oil prices has been primarily driven by speculation about a possible deal between OPEC and major non-OPEC producers to freeze production. As a result, we think that prices will fall back over the next few months as the outcome of next …
US natural gas prices have fallen back in recent weeks, largely as a result of forecasts of milder weather. While we think that production should hold up in the second half of 2016, we are still expecting the Henry Hub price to end the year higher than …
Despite subdued buying from key consumers – China and India – demand for gold had a strong first half of the year. Indeed, renewed interest from Western investors more than offset continued weakness from the jewellery sector. In this Metals Watch we take …
18th August 2016
US inventories of crude oil fell last week, driven by strong demand and lower net imports. But increased drilling activity appears to be feeding through into output. … US Weekly Petroleum Status Report (17th Aug. …
17th August 2016
This is a new monthly publication in which we assess the strength of demand in the world’s largest consumer of metals. We are also introducing our Capital Economics Steel Demand Proxy, to help inform how prices relate to their fundamentals. This …
After falling sharply at the end of 2015, the prices of platinum and palladium have risen by over 20% since the start of 2016. While we remain positive on the medium-term prospects for PGMs, we think that there is an increasing risk of a short-term …
15th August 2016
Despite a slightly weaker dollar, the prices of most industrial metals ended the week lower on the back of mixed data out of China. While industrial activity looks to be holding up reasonably well – at least judging by the hard data on output volumes – …
12th August 2016
In its Q2 Global Demand Trends report, published today, the World Gold Council (WGC) described another strong quarter for gold demand. Renewed interest from Western investors more than offset continued weakness from the jewellery sector. Looking ahead, we …
11th August 2016
While South Africa’s overall mine production shows tentative signs of recovery, the sector’s fortunes remain bleak for the time being. However, surging prices continued to encourage higher PGM output in June. Producer stock building ahead of wage …
