Filtered by Subscriptions: Commodities Use setting Commodities
Aside from a rebound in the cost of sugar prompted by lower production forecasts, the key driver of most commodity prices this past week has been an improvement in sentiment in global financial markets generally. The incoming data have been mixed – …
26th February 2016
Since the start of 2016, gold has benefited from a resurgence in safe-haven demand on the back of global financial market woes. While the gold price could fall back a bit if, as we expect, the Fed hikes rates later in the year, strong buying from both …
A potential agreement between some OPEC members and Russia to freeze oil production at January’s levels, along with fears about slowing economic growth in China and the US, have intensified debate about when the oil market may rebalance. In this Energy …
25th February 2016
While gold imports by China plummeted in January, India’s buying remained strong. Looking forward, local price premiums suggest that the weakness in imports of gold is likely to have persisted through February. However, we expect this soft patch to prove …
Lower Indian wheat harvests this marketing year and next are likely to lead to output falling short of consumption in the world’s second-largest producer. But abundant stocks in the country mean that India’s import demand is unlikely to pick up by much, …
US crude stocks hit another high last week, but gasoline stocks fell, both partly reflecting reduced refinery activity. … US Weekly Petroleum Status …
24th February 2016
Looking past the day-to-day volatility, the prices of many industrial commodities – including oil and base metals – appear to be finding a floor. This is at least consistent with our relatively positive outlook for the rest of 2016, although we are wary …
The recent surge in the price of iron ore is not supported by fundamentals. Chinese steel production fell sharply in January, while efforts to boost iron ore supply are ongoing. As such, we expect prices to ease back in the near term. … The rally in the …
We think that recent reports suggesting China’s aluminium consumption surged last year and that the world market recorded a deficit don’t accurately reflect the fundamentals of the sector. The reality of the situation is that significant oversupply …
23rd February 2016
With the prospect of further sales of China’s vast state cotton stocks continuing to depress Chinese import demand, and US production rising, we think the price of cotton will drop further this year. … Cotton prices to fall as China plans further sales …
World Steel Association (WSA) data, released today, show that global steel output fell by 7.1% year on year in January. Output fell in all major producing regions for the second consecutive month, but there was a particularly sharp drop in China. … …
According to the International Aluminium Institute, global aluminium output fell by nearly 2% y/y in January, largely on account of a decline in China’s production. This supports our view that prices will rise further this year, although we acknowledge …
22nd February 2016
Imports of many industrial metals had surged in December, so somewhat slower growth in January came as no surprise. However, the bigger picture is that China’s imports of metal have remained strong, despite the gyrations in Chinese financial markets and …
The detailed Chinese import data for January, released earlier today, indicate that import demand for agricultural commodities started the new year as it ended the last: weak. … Sluggish start to 2016 for Chinese agricultural import …
China’s imports of palladium and platinum surged in January. The seasonal disruption associated with the Lunar New Year holiday might have distorted the figures to some extent. Nonetheless, strong car production and the relatively high gold/platinum price …
Oil prices have ebbed and flowed in the past week on hopes that at least some OPEC members will be able to agree a deal with Russia to freeze output. Admittedly, the recent talks have left many questions unanswered, including how Iran will respond. There …
19th February 2016
Over short horizons the gold price is often driven by the same factors that determine US Treasury yields. This means that the price of the precious metal now looks increasingly vulnerable to a correction if, as we expect, safe-haven demand wanes and Fed …
The platinum price is set to recover in 2016 as production in South Africa contracts, necessitating a draw-down in the abundant above-ground stocks. We believe that there is a renewed risk of strike action at South Africa’s platinum mines as wage …
US oil stocks returned to the familiar pattern of strong growth last week after taking a brief respite the previous week. On a more positive note for prices, inputs to refineries rose and oil production slipped. … US Weekly Petroleum Status …
18th February 2016
Amid all the recent market turmoil, agricultural commodities haven’t performed too badly, with the S&P GSCI Agriculture index having only fallen by just over 1% since the start of the year. While the latest slide in the US dollar would normally be …
Lead usage has contracted for two consecutive years. However, some of the downturn can be attributed to destocking, as well as a decline in China’s e-bike production. As these trends run their course, new sources of demand and solid growth in vehicle …
The headlines over the last month have focused on the possibility of a deal between Russia and OPEC on oil supply, which culminated in yesterday’s announcement of an agreement to freeze output. Elsewhere, natural gas prices continue to be driven by …
17th February 2016
Although the latest data show that rare earth metal import growth has been slowing in the European Union (EU), this is largely due to base effects. Meanwhile, a number of indicators suggest EU rare earth (REEs) demand is set to rise this year. … Is REE …
Several years of bumper harvests have left key agricultural commodities in abundant supply, helping to drag prices down to levels not seen since 2010. While many prices are probably close to the floor, ample stocks combined with renewed US dollar strength …
The combination of falling supply and stronger demand should set the scene for a recovery in the prices of many industrial metals this year. Meanwhile, although gold will struggle to make further gains in the face of higher US interest rates and renewed …
It has been a quiet few weeks for news from China, as disruption associated with the Lunar New Year holiday has made it difficult to determine exactly how the economy has fared so far this year. Instead, investors’ perceptions on the possible path of US …
16th February 2016
Despite a slump in Malaysian exports to China, overall Chinese palm oil demand has remained strong. However, the increased competitiveness of soy oil is likely to weigh on Chinese demand for imported palm oil, which should ultimately help to lower the …
The oil markets have given a lukewarm response to the tentative deal between Saudi Arabia and Russia to hold their output at its January levels. We are wary too, as it was unlikely that either country would have increased production further anyway. For …
After a weak start to the year, precious metals prices surged last month, bolstered by a weaker US dollar. Gold and silver continued to benefit from safe-haven demand as global equity prices tumbled, but the rally seems to have lost steam as financial …
China’s overall commodity import volumes increased in January, but dipped for some key commodities. However, the seasonal disruption associated with the Lunar New Year holiday was probably behind some of the weakness in the latest figures. … Slow start …
15th February 2016
Given the negativity in global equity markets, the relative stability of industrial commodity prices (especially metals) over the last few weeks has been reassuring. Even Brent crude, while slipping back again in the past week, is at least still above its …
12th February 2016
For most of the last few months the headlines have been dominated by the rout in commodity prices. More recently, the focus has understandably shifted to the bear markets in equities. Nonetheless, the relative stability of industrial commodity prices …
While subdued industrial demand has been one of the main reasons behind the weakness in silver prices over the last few years, 2016 could be the turning point. Indeed, a recovery in the global electronics sector should boost silver usage for industrial …
In its latest World Demand Trends report, published today, the World Gold Council described a strong end to last year for gold demand, as a disappointing H1 gave way to robust growth in the second half of 2015. Indeed, in Q4, demand was up by 4% y/y, …
11th February 2016
Even though we continue to think that oil prices will finish the year much higher than they started it, there is a growing risk that US shale producers will continue to defy forecasts of their demise. … Resilient production could keep oil prices lower …
The recent strength in China’s copper imports has been dismissed by many commentators as a response to an import arbitrage opportunity, rather than as a sign of a pick-up in demand. While the arbitrage window could indeed be boosting imports, we think …
Stocks of crude oil fell slightly last week, while gasoline stocks continued to rise, albeit at a slower pace. The key driver of the dip in crude stocks was a sharp drop in net imports. A small slowdown in product demand bolstered gasoline inventories. …
10th February 2016
OPEC production rose in January as output rebounded after December’s small fall. Even though demand is set to grow by over 1m bpd this year and non-OPEC supply should fall, bulging stocks and high OPEC production will mean that the market will still take …
Upward revisions by the USDA to its estimates for world end-year wheat and soybean stocks have only added to the gloomy outlook for prices, which we think are likely to ease further this year. … More misery for world wheat …
Global central banks increased their gold reserves in December, with China and Russia once again particularly active. We expect further official purchases to continue to be one of several factors supporting the price of gold in the next few years. … …
Data released earlier today by Malaysia’s Palm Oil Board show that palm oil inventories fell sharply m/m in January for the second consecutive month. … Malaysia Monthly Palm Oil Data …
Exchange stocks of lead and tin are now at very low levels and total stocks of most metals have fallen since the start of the year. Of course, there may well be unreported stocks but, at face value, markets appear to be tightening. … Low stocks are …
9th February 2016
With El Niño reducing rice production in key producing and exporting countries, a tighter world market should give the price of Thai rice a lift this year, despite headwinds from weakness in the baht. … Tightening world rice market to give prices a …
8th February 2016
Iron ore prices have now recovered from December’s lows, close to our end-year forecast. We expect demand from China’s steel sector to disappoint this year, so wouldn’t be surprised to see prices dip over the next few months. But production cuts should …
Oil prices have slumped dramatically over the last six months, but have rebounded a little over the last week. In this Energy Watch we focus on the main factors likely to drive prices over the next few years. Given that the outlook is unusually uncertain, …
5th February 2016
Tin usage should pick up in 2016, led by a recovery in the global electronics sector. Given constrained supply, the price of tin could rally strongly. … Tin to outperform other base metals this …
A visitor from Mars might have been confused by the responses of commodity markets to US economic data in the past few days. Prices jumped in dollar terms after the publication on Wednesday of a weak non-manufacturing survey, only to give back some of …
US exports of semi-manufactured silver remained subdued in November, consistent with the weakness of global industrial demand at the time. In contrast, investors continued to buy into falling prices, boosting demand for coins. … US silver imports and …
The dollar prices of many commodities have been boosted this week by declines in the value of the US currency. Any recovery may be good news for producers regardless of the underlying cause. Nonetheless, swings in commodity prices driven largely by FX …
The recent sharp falls and partial recovery in the price of Brent crude oil have grabbed the headlines. But focusing on Brent (or the traditional US benchmark WTI) alone doesn’t tell the whole story. The OPEC basket price has plunged even further and …
