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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 …
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 …
Strong growth in the number of solar installations in China and the US should see silver demand from the sector increase by over 20% y/y in 2016. While solar power currently accounts for just a small portion of total silver demand, we expect it to …
Overall demand from the world’s two largest consumers of gold remained subdued in April. While gold imports were more resilient in China, there was a further sharp fall in shipments to India. But we expect pent-up jewellers’ demand to precipitate stronger …
26th May 2016
A slight easing of refinery demand was overshadowed by a sizable drop in net oil imports which weighed on the level of US crude inventories last week. … US Weekly Petroleum Status …
25th May 2016
Having underperformed in the first quarter, the price of nickel surged in April, only to fall back more recently. The rally did, however, raise the question of whether the four-year long downturn in nickel prices was finally coming to an end. While we …
Back in February we said that we were cautiously positive on lead demand this year and next. While we remain confident about a tighter supply outlook, we now believe that lead’s demand prospects are weaker than previously thought. We have altered our …
23rd May 2016
The volume of China’s metals imports generally eased back last month from their March highs, but were still buoyant. With copper stocks starting to fall, signs of a cyclical pick-up in the economy and recent falls in prices, we would expect imports to …
Commodity prices fell back in the past week after the release of the minutes from the April FOMC signalled that US interest rates could yet rise as soon as next month. The markets are still only pricing in a 30% chance of a June hike, which suggests there …
20th May 2016
World Steel Association (WSA) data, released this afternoon, show that global steel output rose by 0.5% year on year in April. However, after sharp falls in January and February, global steel output still fell by 2.8% y/y in the first four months of the …
Oil prices have continued to rally over the last month, especially the US benchmark WTI, which has been boosted by the disruptions to supply in Canada. Indeed, these outages have more than offset the negative impact of a stronger dollar since the …
According to the International Aluminium Institute, global primary aluminium output declined by 0.6% y/y in April. But the headline figure does not tell the whole story. Indeed, apart from in the US, we still expect production growth to gather pace this …
We expect the Fed to hike rates by more than the markets currently anticipate over the next couple of years, prompting further occasional weakness in the prices of gold and silver. Nonetheless, the gradual return of US rates towards more normal levels …
The next meeting of the Organisation of the Petroleum Exporting Countries (OPEC), on 2nd June, is unlikely to be as interesting as the previous one in December, when the group decided to effectively abandon its oil production quota. We do not think that …
19th May 2016
With the London Platinum Week coming to an end, we are taking stock of the highlights from the past week of meetings with the major representatives of the PGM industry. The general sentiment across the industry is moderate optimism, with high above-ground …
A further increase in demand for oil from refineries and Canadian supply constraints were insufficient to reduce the level of crude inventories last week. … US Weekly Petroleum Status …
18th May 2016
The price of steel in the US market has surged recently but it could be yet another commodity where premature price rises encourage additional supply. We caution that prices may fall from here as supply picks up, but still expect US steel prices to end …
Commodity price indices have risen in the last month, encouraged by the rally in oil prices. Although we are positive on the medium-term outlook for industrial commodity prices, we would caution that some markets may have risen too far, too quickly. …
17th May 2016
Precious metals prices rallied last month, flattered by the recent US dollar weakness. Investors in the futures market added to their net-long positions, but the recent mixed news on the health of the Chinese and US economies dulled sentiment towards the …
The continued recovery in the price of crude oil has lifted Brent close to $50 per barrel, prompting a wave of positive headlines and upward revisions to analysts’ forecasts. However, for now we are leaving our end-2016 projections for both Brent and WTI …
16th May 2016
Although OPEC production rose last month, the increase was contained by numerous supply disruptions. This suggests that, once the outages have been resolved, output will grow more strongly, as producers try to make up for the recent production shortfall. …
13th May 2016
The stronger US dollar and renewed concerns about the robustness of the credit-led recovery in China’s economy weighed on metals prices this week. However, oil benefited from the disruptions to supply from Canada and Nigeria, while the prices of grains …
In this new monthly publication, we intend to focus on key developments in agricultural commodities as well as draw on the more in-depth analysis from our Energy and Metals services. This month, we discuss the latest World Agriculture Supply and Demand …
We expect the recent under-performance of copper prices relative to oil to be reversed over the remainder of the year. Oil prices have been boosted by supply outages which should prove temporary, while further gains are likely to be capped by the …
In its Q1 Global Demand Trends report, published today, the World Gold Council (WGC) described a strong quarter for gold demand. A sharp recovery in investor sentiment more than offset a fall in jewellery demand from key consumers. Looking ahead, we …
12th May 2016
We are forecasting that the price of Brent Crude will reach $60 per barrel by the end of next year, but there are several reasons why we do not expect European natural gas prices to experience a similar recovery. In fact, we expect some divergence between …
