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We are now even more positive on aluminium demand in the near-term, based partly on our new Capital Economics Demand Proxy, but believe that supply growth will put a lid on prices by end-year. … Aluminium demand is stronger than often …
4th July 2016
The prices of both industrial and precious metals have jumped in the last month, despite falling initially in the wake of the UK’s vote to leave the EU on 23rd June. Prices subsequently recovered on hopes that signs of weak economic activity in China will …
The price of gold has predictably done well in the wake of the UK’s surprise vote to leave the EU (‘Brexit’). But the real star of the show has been silver, whose price has already jumped by nearly 20% in US dollar terms in the past month to within …
1st July 2016
Commodities outperformed equities in June as the UK’s surprise vote to leave the European Union sapped risk appetite in global markets. Gold prices predictably benefited from the heightened uncertainty, with silver the star of the month. But industrial …
The price of gold has predictably done well in the wake of the UK’s surprise vote to leave the EU (‘Brexit’). But the real star of the show has been silver, whose price has already jumped by 20% in US dollar terms in the past month to within touching …
With fears over the impact of the UK’s potential exit from the EU having faded, the focus of commodity markets may soon return to China’s economy and currency. The third successive monthly fall in China’s unofficial manufacturing PMI does not bode well …
The sharp drops in the prices of riskier assets, including oil, after the UK voted to leave the EU have dominated headlines. However, oil prices are now more or less back to their pre-Brexit levels, whilst natural gas and coal prices have been more …
US inventories of crude oil fell sharply in the week to 24 th June, on the back of constrained supply and higher refinery demand, but gasoline stocks rose again. … US Weekly Petroleum Status …
29th June 2016
Disruptions to oil supplies in Canada and Nigeria have been behind most of the rally in oil prices over the past month. However, demand has also been growing strongly and we do not think that Brexit will dampen it by much, if at all, in the near term. …
Following downward revisions to our projections for China’s growth, we are also nudging down our forecast for the price of copper. Despite sizeable policy stimulus in China, it has become apparent that credit allocation has been relatively inefficient …
Tesla, Chevy, and Nissan, three major car makers , have recently announced plans to start selling long-range affordable electric vehicles (EVs) over the next few years. This could potentially be a game-changer for the global auto market as it could …
28th June 2016
China’s gold imports rebounded strongly in May, after a weak start to the year. While premiums in the local market have recently turned negative, Brexit fears could spur a fresh wave of safe-haven buying over the coming months. Meanwhile, India’s imports …
27th June 2016
Unsurprisingly, the prices of most commodities have fallen in the wake of the UK’s vote to leave the EU. The main exception is gold, which has benefitted from renewed safe-haven demand as well as the expectation that the uncertainty created by the UK vote …
24th June 2016
The UK’s vote to leave the EU has predictably undermined the prices of industrial commodities, including oil (which initially fell by around 5% in US dollar terms) and copper (-3%), while boosting those of safe havens such as gold (+5%). However, these …
US inventories of crude oil fell again last week, but by less than expected. On the other hand, gasoline stocks rose as refineries pumped out more fuel. … US Weekly Petroleum Status …
22nd June 2016
World Steel Association (WSA) data, released this afternoon, show that global steel output fell by a negligible 0.1%y/y in May. However, after a weak start to the year, production still fell by 2.2% y/y in the first five months of 2016. … Global Steel …
21st June 2016
China’s metals import demand in May remained robust but down from the highs reached in March. In some cases, lower supply and higher prices are acting as constraints on import volumes. … China’s metals imports treading …
According to the International Aluminium Institute, global primary aluminium output declined by 0.5% y/y in May. But the annual figure masks the underlying picture of higher prices continuing to encourage a recovery in production, particularly in China. …
20th June 2016
Early signs that rising crude prices have induced oil companies to bring drilling rigs back online suggest that US output could rise sooner than previously thought, especially in light of the efficiency gains made by the industry. But we still believe …
Worries about contagion from a UK vote to leave the European Union (‘Brexit’) have undermined the prices of riskier assets this past week, including oil and other industrial commodities, while boosting those of safe havens such as gold. In our view, many …
17th June 2016
India’s gold demand has undeniably been weak so far in 2016, but we expect buying to pick up later in the year due to the release of pent-up demand following a jewellers’ strike in Q2 and to the approaching wedding and festival season, which is the time …
A surge in investment in renewable energy capacity over the last few years has led to these alternative power sources taking market share from fossil fuels. This trend looks set to continue over the next decade, which should continue to weigh on coal …
The price of iron ore appears to have stabilised around $50 per tonne, after a dramatic run-up earlier this year. But we think prices will continue to ease back given oversupply and waning demand. … Iron ore prices have further to …
The commodity price indices have risen in the last month, encouraged by rising oil prices and by a scaling back of expectations for US interest rate rises which in turn has weakened the dollar. But industrial metals prices came under pressure more …
16th June 2016
US crude stocks fell again last week due to lower imports and production. Demand for gasoline rose to an all-time high as low prices continue to stimulate consumption. … Energy Data …
15th June 2016
14th June 2016
Commodity price indices have had another strong month, supported by positive investor sentiment and the rally in the oil price. However, sentiment started to sour more recently on mixed data out of China and some strengthening of the US dollar. Meanwhile, …
OPEC’s oil production slipped in May as disruptions to output in Nigeria outweighed increases in production elsewhere. Meanwhile, the group left all of its major forecasts unchanged but suggested that the oil market was likely to tighten significantly in …
13th June 2016
Commodity prices have generally risen in the past week, helped by further dollar weakness. However, sentiment already appears to be turning more cautious on renewed concerns over the health of the global economy and worries about Brexit. A UK vote to …
10th June 2016
There appears to be an increasingly close relationship between the gold price and the chances of the UK voting to leave the European Union, as implied by bookmakers’ odds. This is consistent, of course, with the precious metal’s traditional role as a safe …
A UK vote to leave the European Union (“ Brexit ”) would presumably have a negative impact on global business and investor confidence. This in turn is likely to undermine the prices of industrial commodities and boost demand for safe havens, including …
9th June 2016
The gold price has rallied this week as expectations of a June rate hike by the Fed have been abandoned. However, while we expect that the Fed will resume its tightening later in the year, real interest rates should remain low, supporting a higher gold …
It is likely that further disruptions to Nigerian oil output over the next few weeks and months will continue to support oil prices, even as production from Canada returns. … Nigerian oil output disruptions are another wildcard for …
South Africa’s overall mine production remained subdued in April, but PGM output did recover somewhat. We maintain that renewed efforts to curb output should underpin price gains later in the year. … South Africa’s Mine Production …
US crude oil inventories fell for the third week in a row last week thanks to lower net imports and stronger refinery demand. Notably, overall production rose on the week. … US Weekly Petroleum Status …
8th June 2016
The price of tin has risen since the start of the year in large part owing to temporary bottlenecks. However, we think the price gains will prove sustainable given more long-term constraints on supply. … What next for …
Forecasts of an abnormally hot summer should continue to see strong demand for electricity supporting US gas prices. But high production and stocks will limit the upside. … Weather forecasts heat up US natural gas …
China’s commodity demand remained strong in May. While arbitrage opportunities and stockbuilding may explain some of the strength, it also looks likely that fiscal and monetary stimulus measures are boosting physical demand. … China’s commodity imports …
We think that despite the recent optimism that the worst may be over for coal prices, the ongoing structural decline in demand over the next few years will probably lead to a renewed fall in prices. … Rally in coal prices likely to be …
7th June 2016
Exchange stocks of most metals have been falling. The exceptions are lead and tin stocks which have jumped recently, from a low starting point. The ease with which stocks of these two metals have been rebuilt highlights the risk that unofficial stocks of …
6th June 2016
Metals prices bounced on Friday, led by silver, gold and copper, as the downbeat US payrolls report quashed expectations of a summer rate hike by the Fed and dragged the dollar lower again. This positive spin on otherwise poor economic data trumped …
3rd June 2016
Precious metals prices fell across the board in May. A strong dollar on the back of upward revisions to US interest rate expectations was the main factor behind the poor performance of the sector. However, weakness in the latest US non-farm payroll data …
The prices of almost all the industrial metals fell in May. A combination of an upward revision to US interest rate expectations, a stronger US dollar and renewed concerns about China’s demand weighed on prices. Indeed, we had warned that the rally in …
US crude oil inventories slipped again last week as production continued to fall. Gasoline inventories were also dragged lower by strong demand. … US Weekly Petroleum Status …
2nd June 2016
Following the release of the Fed’s May FOMC minutes, upward revisions to US interest rate expectations and a subsequent appreciation of the dollar brought the recent rally in many commodities prices to an abrupt halt. The exceptions were the prices of …
1st June 2016
Another set of lacklustre China PMI surveys and recent falls in the renminbi against the dollar are weighing on the prices of many commodities again today. China’s economic recovery should still pick up steam later in the year, but fears of a more …
If precious metals continue to take their lead from the currency markets and if the US dollar surges in response to a June or July hike from the Fed, then the price of gold could slump to as low as $1,000 per ounce and silver to as low as $13. But …
31st May 2016
We have been positive on the outlook for cobalt demand for some time but, if anything, prospects are continuing to improve. Lithium-ion batteries, the majority of which contain cobalt, are rapidly increasing market share. At the same time, growth in …
Oil prices have continued to recover, with Brent at least briefly topping $50, but this positivity was not replicated across the board. Indeed, the recovery in oil probably contributed to the weakness in gold, as it removed another excuse for the Fed to …
27th May 2016
Declining output of crude in Latin America is one factor supporting our view that the global oil market will return to balance on a more sustainable basis by the end of 2016. That said, we think it is wrong to assume that wider economic and political …
