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Despite the flurry of macro data, it was a relatively quiet week for most commodity prices. Generally, a slight weakening in the US dollar, on net, contributed to small price rises. Oil market deficit just got deeper Oil prices were among the largest …
7th July 2023
How will the combination of El Niño and human-driven global warming affect commodities and economic performance over the short and long term? … El Niño – Macro, policy and market …
Expectations of fiscal stimulus in China have thrown previously floundering copper prices a lifeline. If policymakers go ahead, that may keep a floor under prices before a turnaround in construction in China and accelerating electric vehicle rollouts …
5th July 2023
After fluctuating between $500 and $600 per 1,000 board feet for most of this year, we expect the US lumber price to fall from around $520 today to $475 by the end of the year due to weaker demand. The key risk to our forecast is that concern grows about …
We recently held a Drop-in titled “Industry’s decarbonisation challenge – From aviation to property”, which you can view on-demand here . This Update addresses some of the questions we received during the event, including those that we did not have time …
3rd July 2023
China’s PMI aren’t consistent with some of the worst fears around China’s reopening recovery and weak commodities demand. But neither are they positive enough to warrant the boost to prices, such as steel, last month. For that, hopes of fiscal stimulus …
There wasn’t a consistent direction to commodity prices this week. Natural gas prices in Europe and Asia rose (1) , indicating stronger competition for LNG cargos. Meanwhile, most industrial metals prices fell due to pessimism around the outlook for …
30th June 2023
Overview – We expect most commodity prices to struggle this year against a backdrop of a stronger dollar and deteriorating investor risk appetite. Energy-related commodities will be the exception. We expect prices to tick up later in the year owing to …
29th June 2023
With the Fed still hinting at more interest rate increases, the dollar strengthened and contributed to declines across most commodity prices this week. One of the few prices that did increase was the Asia LNG price, which rose by 7% (1) . This seems …
23rd June 2023
If the weather forecasters are right, El Niño conditions have arrived in the Pacific and are set to build over the next few months. The negative impact on agricultural production will depend upon the strength and duration of these conditions but sugar, …
Note: We’re holding a 20-minute briefing on the challenges that aviation and other key industries face in decarbonising at 10:00 EDT/15:00 BST on Thursday, 29th June. Register now . Despite jet fuel being a fairly small share of total oil consumption, …
21st June 2023
Steel mills slamming the brakes on production Global steel production fell sharply in y/y terms in May. Against the backdrop of subdued demand and stringent supply caps in China, the supply outlook over the next few months appears bleak. According to the …
Aluminium production growth could start to pick up soon If reports of a forthcoming easing of output restrictions in Yunnan province are accurate, then the ongoing slowdown in China’s aluminium production growth could come to an end soon. Much will also …
20th June 2023
We think that the lead price will struggle over the next few months as high interest rates weigh on new vehicle (and lead-acid battery) demand growth and new supply comes online in Australia and Germany. Heading into 2024, we think that the shift to …
19th June 2023
Most prices rose this week (1) , helped by a weaker dollar, stronger-than expected US retail sales in May and interest rate cuts by the People’s Bank of China. Natural gas prices rose particularly sharply due to a number of unrelated disruptions to …
16th June 2023
The latest OPEC oil market report confirms that OPEC countries implemented a fresh round of voluntary production cuts in May, slashing the group’s crude output by 0.4m bpd. Similar to OPEC’s own view on the oil market, we think that it will tighten …
13th June 2023
The latest OPEC oil market report confirms that OPEC countries implemented a fresh round of voluntary production cuts in May, slashing the group’s crude output by 0.4m bpd. Similar to OPEC’s own view on the oil market, we think that it will tighten later …
Having fallen steadily for much of the last year, European natural gas prices surged last week. The catalyst was constrained supply. Given seasonally high stocks and subdued demand, we are not worried yet about another price spike. But Europe has to avoid …
12th June 2023
The oil price ended the week flat despite Saudi Arabia pledging to cut output by 1m bpd in July at the OPEC+ meeting last weekend. Most other commodity prices rose, supported by China’s May trade data which showed strong growth in most commodity imports. …
9th June 2023
Preventing large-scale leaks of methane from Turkmenistan’s creaking infrastructure would be a welcome sign of emissions-cutting efforts broadening out from carbon dioxide to include other harmful greenhouse gases too. But while Turkmenistan has become …
8th June 2023
Overview – Most commodity prices have moved lower over the past month as concerns about demand loomed large and the US dollar strengthened. We think that prices will continue to struggle over the next few months, but energy and metals prices should rise …
7th June 2023
Growth in China’s commodity imports generally was strong in May, with a notable rise in crude oil imports. While the data are consistent with our above-consensus outlook for China’s growth this year, a note of caution needs to be applied. Export demand …
Oil output will be more constrained in the second half of this year if the OPEC+ members stick to their recently-announced production quotas. However, we have also raised our forecast of Russian production given the persistent strength in its exports. As …
5th June 2023
It was a week of two halves, with prices initially falling before the passage of the US debt ceiling bill and a strong US May employment report saw prices recoup some of those losses later in the week. Attention is now turning towards the OPEC+ meeting in …
2nd June 2023
US product demand remains resilient Oil prices surged on the back of this week’s report, which managed to successfully tear investors’ attention away from the upcoming OPEC+ meeting this weekend. In isolation, there was little to suggest this was a …
1st June 2023
OPEC+ is unlikely to change its output target at the meeting this Sunday. After all, crude supply is already constrained, but prices have fallen on demand concerns. Accordingly, it is unlikely that further cuts would prompt a large rebound in prices. …
China’s PMI surveys suggest that the economic recovery is ongoing, but the pace of growth has slowed. While a lower reading for construction activity is a negative for metals prices, the persistent strength of the services sector is consistent with our …
Commodity prices generally fell this week, as investors’ expectations for the Federal Reserve’s policy rate rose on concern about the persistence of high inflation. The dollar also strengthened. Declines in many equity indices also pointed to a risk-off …
26th May 2023
The aviation sector is pinning its hopes on sustainable aviation fuel to help cut its carbon footprint over the coming decades. But any ramp-up in biofuel usage would pit aviation against the needs of other sectors and industry officials are becoming more …
25th May 2023
China’s refineries pumped out more oil products than at any point in their history in the first four months of this year. This is perhaps not too surprising given that the removal of COVID-19 restrictions was always going to give a boost in demand. But a …
The long-awaited inclusion of WTI Midland into Dated Brent is now taking place in a gradual month-long process that started on 2 nd May. The inclusion of Midland could be a factor weighing on the Brent-WTI price spread in the coming months, but we …
24th May 2023
The strength in US product demand is unlikely to be sustained Commercial stocks slumped as imports fell sharply. Meanwhile, implied product demand rose, but we think the usual summer boost to demand may be more subdued this year as economic growth slows. …
Lower steel production in April a sign of things to come Steel mills reduced output in April in y/y terms, meaning that global production is down year-to-date. We think that producers will continue to limit output for a few more months due to tepid …
23rd May 2023
Dealmaking was a major driver of commodity prices this week. The 11 th hour extension of the Black Sea Grain Initiative alleviated fears of Ukraine’s grain exports being cut off from world markets, pushing corn and wheat prices down. And in the US, …
19th May 2023
Our in-house metals demand proxies show that growth held steady in February. While growth will accelerate in the coming months due to base effects, we think that underlying demand is more subdued. The CE Demand Proxies aim to measure physical demand for …
18th May 2023
Commercial stocks build, prices likely to remain subdued Commercial stocks rose for a second consecutive week even as production fell and refinery utilisation picked up. Releases from strategic reserves supported stocks and are likely to continue to do so …
17th May 2023
Overview – Most commodity prices have moved lower over the past month as concerns about demand have intensified and risk appetite has soured. We think prices will continue to struggle over the next few months as tight monetary policy feeds into slowdowns …
16th May 2023
Note: We’ll be discussing the radical shake-up facing global energy markets and our long-term energy demand and climate forecasts on Wednesday, 17th May at 10:00 EDT/15:00 BST. Register here. The demand backdrop for commodities appears weak. While oil …
12th May 2023
OPEC crude oil production declined in April due to export disruptions in Iraq. Production should fall even further in May when OPEC+ output cuts come into effect. Elsewhere, the easing of some US sanctions on Venezuela should mean production there rises …
11th May 2023
Oil demand holding up, but prices likely to remain subdued Today’s stocks report showed a rise in commercial crude inventories last week, confounding analyst expectations of a drawdown. However, total stocks fell, which helps to explain why oil prices …
10th May 2023
China’s commodity imports were generally weak in April. We suspect that import volumes generally could soften a bit further as any reopening effect on commodity demand fades and export demand deteriorates owing to sluggish growth in the rest of the world. …
9th May 2023
Most commodity prices, but especially energy and industrial metals, fell this week. Concern about demand in advanced economies, particularly in the US due to the banking sector problems, contributed to the declines. What’s more, China’s April PMIs …
5th May 2023
Concern about banks and the US debt ceiling will keep the gold price historically high in the next few months. However, once these worries fade, we think that longer-term headwinds will come into play. At around $2,010 per ounce today, the gold price …
The key message from the latest China PMIs is that whilst China’s economy is likely to grow strongly this quarter, momentum is fading. This will be one factor weighing on commodity prices in the near term. China’s Caixin manufacturing PMI fell from 50.0 …
4th May 2023
Tentative signs of weaker demand Commercial stocks continued to fall last week despite lower refinery runs and higher net imports. On the products side, total demand eased back. Of course, one week's data are not sufficient to mark a turning point, but we …
3rd May 2023
Commodity prices generally fell earlier this week on the back of investors’ growing concerns about the outlook for commodities demand. Later in the week, the release of softer-than-expected US Q1 GDP data did nothing to soothe those fears. We expect …
28th April 2023
The global energy market is in the early days of a radical redesign due to the need to cut greenhouse gas emissions. In this Focus , we introduce our long-term energy market forecasts, which are characterised by continued growth in energy consumption and …
27th April 2023
Product demand proving solid, for now Commercial stocks fell last week as production and net imports declined. Meanwhile, product demand remains resilient, but we doubt oil demand can weather the mounting economic headwinds much longer. The EIA’s latest …
26th April 2023
JODI data show that oil demand held up in advanced economies at the beginning of the year. We suspect this won’t last though as weakening economic activity drags on demand over 2023. The data also show that natural gas demand in Europe fell in February, …
In this new quarterly publication, the Capital Economics’ Climate and Commodities teams will track and analyse developments in the transition to a greener global economy. The sharp increases in the lifetime costs of wind and solar projects since 2021 …
