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We think that the risk of the oil market being disappointed by any deal to freeze production in Doha on Sunday is high, given that oil prices have rallied by over 10% in the last week alone. Any deal is unlikely to change our supply outlook, so we still …
14th April 2016
South Africa’s PGM production fell sharply in February for the second consecutive month, suggesting that mining firms are finally cutting output in response to lower prices. Looking ahead, wages are due to be renegotiated in the next couple of months …
With large divergences in stock movements between individual metals, it is unlikely that industrial demand has been the main driver. Instead, trends in inventories appear to have had a better relationship with supply developments since the start of this …
US crude oil inventories rose last week thanks to a rise in net imports and to a fall in inputs to refineries, which helps explain why gasoline stocks were down on the week. … US Weekly Petroleum Status …
13th April 2016
OPEC production was stable last month. However, the group has cut its forecast for demand growth this year on fears of slower economic growth in China and Latin America. … OPEC trims its demand outlook on growth …
Global aluminium output fell again in February, according to the International Aluminium Institute (IAI). But smelter restarts in a still over-supplied market could limit the scope for price increases. … Still some way off from sustainable aluminium …
The USDA’s latest demand and supply estimates continue to provide little evidence of any shortage of global corn, wheat and soybean supplies heading into the 2016/17 season. As such, we think prices are more likely to fall than rise over the coming …
China’s commodity import volumes rose in March, rounding off a strong quarter for import demand. However, local stocks have been building, suggesting that we will need to see a pick-up in activity if this strength is to be sustained. … A strong quarter …
The price of tin has rallied by more than other metals prices since mid-January. We think this reflects the tight supply picture and low stocks. However, with growth in demand likely to remain subdued, the rally may not have too much further to run. … …
12th April 2016
Expectations that the Fed will hike rates sooner rather than later, coupled with the uncertainty still surrounding China’s economy (although both sentiment and the hard data have improved lately), weighed on the prices of precious metals last month. …
11th April 2016
Data released earlier today by Malaysia’s Palm Oil Board show a further tightening of the market in March, despite a larger-than-expected rise in production. … Malaysia Monthly Palm Oil Data …
Commodity prices had a mixed week, despite support from further softness in the US dollar. In particular, key industrial metals dropped back, consistent with our view that the earlier surge was largely sentiment-driven and a little premature. In contrast, …
8th April 2016
Fuel consumption by US motorists is set to grow strongly again this year, despite a shaky start, as robust employment growth encourages more people to drive and demand for less fuel-efficient trucks and SUVs remains high. Greater US gasoline demand …
Despite last week’s fall in the wake of strong US economic data out, we think that gold’s rally this year is far from being over. In particular, we expect building inflationary pressures in the US to keep real interest rates low, boosting the …
A pick up in US single-family home building should continue to support the price of US lumber this year even if the Canadian dollar gives back some ground against the greenback. … Strong US home building to underpin the price of …
7th April 2016
The price of zinc has rallied strongly, and by more than other metals, reflecting the prospect of lower supply. But we think that the demand outlook is also positive, which will add further support to prices. … Zinc demand looks …
US crude oil inventories fell last week, but gasoline stocks rose, both partly reflecting increased refinery activity. … US Weekly Petroleum Status …
6th April 2016
Buying of gold by central banks slowed in February but this appears to be largely due to seasonal factors. The case for gold as a strategic reserve asset remains intact and we expect purchases, mainly by EM central banks, to resume later in the year. … …
US imports of silver fell in January suggesting that industrial demand was yet to recover. However, more timely data show that low prices have continued to stimulate investor demand for coins. Meanwhile, US production of silver continued to fall, helping …
5th April 2016
The prices of most industrial metals rose strongly for much of March, but eased back towards the end of the month and in early April. Indeed, a weaker US dollar (on lower market expectations for US interest rates) and a more general upturn in investor …
It has been a good month for agriculturals, with the S&P GSCI agriculture index rising by a little under 4% since the start of March. This reverses the downward trend in January and February. Furthermore, it was almost a full house of price gains, with …
Over the past month, the performances of precious metals have diverged. After a strong start to March, the prices of gold and silver fell back as expectations for further monetary tightening in the US were brought forward following strong US employment …
Comments from a leading Saudi Arabian official on Friday have led markets to reassess the prospect of a deal being done in Doha later this month to freeze OPEC and Russian oil production. In our view, some sort of compromise agreement is still likely, …
4th April 2016
With sizeable US inventories and the likelihood of large US corn and soybean plantings this year, we remain of the view that prices of grains and soybeans are likely to fall over the course of the year. … Surge in US acreage doesn’t bode well for corn …
1st April 2016
Markets began the second quarter on Friday on a sour note, with sentiment undermined both by a weak Tankan survey in Japan and, rather perversely, by another robust Employment Report and a buoyant ISM manufacturing survey in the US. With core inflation …
The jump in China’s two manufacturing PMIs in March suggest that policy stimulus is starting to work, although these reports alone only validate the earlier rally in industrial commodity prices rather than pointing to further gains. Today’s other data …
Commodity prices had another strong month in March, supported by some weakness in the US dollar and the ongoing improvement in investor sentiment towards riskier assets. Tentative signs of a pick-up in China’s activity indicators also lent more …
In this Metals & Mining Watch , we peer into the murky world of aluminium stocks on the LME. We ask whether LME stocks data are, and can expected to be, reliable indicators of the economic drivers which underpin movements in aluminium prices. Having …
One of the strongest El-Niño’s on record has been largely to blame for the unusually mild winter weather recently. Indeed, last year was the warmest on record and February this year was the hottest ever recorded. In this Energy Watch we examine the impact …
31st March 2016
The price of rhodium is set to recover over the next couple of years as (i) cuts to capital expenditure in South Africa start to take their toll on production and (ii) usage of the metal in autocatalysts is boosted by stricter emission standards and the …
The European Union (EU) sugar regime governs the production, sale and trade in sugar within the region. In 2017, the regime will be liberalised: production quotas will be abolished and guaranteed prices abandoned. In this Agricultural Commodities Watch , …
US crude oil inventories hit a new record for the seventh consecutive time last week, despite a surge in inputs to refineries, a further drop in US oil production and lower imports. On the other hand, gasoline stocks continued to fall. … US Weekly …
30th March 2016
The balance of power in the liquefied natural gas (LNG) marketplace has shifted to the consumer given the ongoing ramp-up in supply and the fall in cost of competing fuels. Although spot LNG prices have plummeted in the last two years, there is little to …
The rally in copper prices since mid-January has been flattered by a weaker dollar and improved investor sentiment. However, we think a more sustainable recovery in the price will happen later in the year supported by declining supply and steady growth in …
29th March 2016
The individual breakdown of China’s total rare earth element (REE) exports shows that exports of most REEs continued to grow strongly in the first two months of this year. … China’s REE exports prove …
Gold imports by both China and India remained weak in February. We think this was partly due to the strength of the gold price and partly to temporary factors, notably the Lunar New Year holidays in China and the uncertainty over the taxation of jewellery …
Industrial commodity prices have typically eased back in the past week in sympathy with other assets, as markets have reassessed the outlook for US interest rates and the dollar. In particular, (poorly founded) speculation that G20 central banks meeting …
24th March 2016
After a weak 2015, the prices of gold and silver have rallied since the beginning of the year, underpinned by safe-haven demand and rising inflation expectations in the US. Yet, silver has failed to benefit by as much as gold from the improved sentiment …
A weaker dollar, fading fears about the economies of both the US and China, combined with a positive turn in sentiment towards commodities and risky assets in general have helped to boost oil prices over the last month. However, the warmest February on …
US crude oil inventories hit a new record for the sixth consecutive time last week as a surge in imports filled storage tanks. On the other hand, gasoline stocks fell sharply and US crude oil production continued to slip. … US Weekly Petroleum Status …
23rd March 2016
Followers of our relatively upbeat research since January may not be surprised to hear that we expect many commodity prices to rally further. (See our quarterly Commodities Analyst , “Oil to lead a broadbased recovery”, published on 1st February, and our …
With the negative effects of El Niño on palm oil production likely to continue in the coming months, we have raised our near-term price forecast. But as output returns to normal and competition from soy oil remains strong, we think the price of palm oil …
The foundations of the recent recovery in oil prices look a little shaky and some temporary pull-backs may be inevitable. For now we are therefore leaving our end-2016 forecasts (for both Brent and WTI) at $45 per barrel, not much higher than today’s …
Chinese steel prices have surged recently but we think they are unlikely to hold on to their recent gains, as the underlying fundamentals remain weak. Although we expect growth in steel usage to turn positive this year and some production capacity to …
World Steel Association (WSA) data, released today, show that global steel output fell by 3.3% year on year in February, although this represented an improvement from the January drop of 7.1%. … Global Steel Production …
21st March 2016
The detailed Chinese import data for February, released earlier today, indicate that import demand for agricultural commodities continued its generally lacklustre start to the year. … Weak start to 2016 continues for China’s agricultural …
Strong growth in China’s metals imports, which started in the final quarter of 2015, continued in January-February. Some of the buying may have been opportunistic, given low prices, but it also points to a pick-up in demand or, at the very least, hopes …
China’s imports of palladium and platinum continued to rise strongly in February. We expect imports to remain buoyant over the coming months as car output trends higher and demand for platinum jewellery recovers after a weak 2015. … China’s PGM imports …
