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While the US EPA’s finalised renewable fuel standard should boost demand for US corn next year, we think ample global supplies will continue to weigh on the price in the near term. … Ample supplies to keep corn prices under …
2nd December 2015
The prices of commodities continued to fall in November, pummelled by the strength of the US dollar and persistent concerns about a hard landing in China. While supply-side developments explain the relative strength of some agricultural commodities, news …
1st December 2015
There are many factors behind the current weakness of commodity prices, including the overhang of supply from the previous boom, the strength of the US dollar, and poor investor sentiment. But there is at least some better news on the prospects for …
A pick up in global growth over the next few years, especially in major oil consuming countries, should help demand for oil to remain strong rather than tail off. This in turn should support oil prices, although the size of the current market surplus …
30th November 2015
China’s metal refiners have been announcing output cuts in 2016. Although Chinese producers have a poor record on curtailing production, we think a combination of reduced raw material supply and government backing for the cuts will lead to lower metal …
2015 has seen the prices of corn, wheat and soybeans fall sharply, dragged lower by a combination of large harvests, rising global inventories and weak currencies in a number of key producing and exporting countries. In this Agricultural Commodities Watch …
US dollar strength and the prospect of rising US interest rates continued to weigh on precious metals prices this week. In contrast, industrial metals prices were volatile, but generally ended the week a touch stronger on news of further supply cuts. …
27th November 2015
Iron ore prices have weakened sharply since September and have recently fallen below $45 per tonne, weighed down by slower demand growth and excessive supply. Given these weak market conditions, we expect iron ore prices to remain under pressure in the …
Persistently weak prices of platinum group metal (PGMs) have forced the three largest PGM miners in South Africa to undertake deep cuts to their capital expenditure, workforce and cost structure. At current prices, about 70% of the PGM industry is …
The next meeting of the Organisation of the Petroleum Exporting Countries (OPEC), on 4 th December, is set to be much more interesting than the one in June. Indonesia will re-join the group for the first time since it left in 2009. That said, most of the …
26th November 2015
The collapse in the nickel price this year is hard to justify based on fundamentals alone. Ultimately, we expect further constraints on supply, amid steady growth in demand, to boost prices in 2016. … Deteriorating supply prospects should lift nickel …
Mainland China’s gold imports from Hong Kong fell in October following increases in the three previous months. We expect total imports by China to rise in the coming months and imports by India to pick up too, as low prices prompt additional buying and …
The recent weakness of oil prices has weighed on the prices of major agricultural commodities, since oil is an important component of crop production costs and oil prices affect demand for agriculture-based biofuels. Although we expect the prices of …
US crude oil stocks rose again last week, but the big picture is still that stocks appear to be levelling out. Meanwhile, gasoline stocks jumped as refinery runs continued to increase and demand for products eased off a little. … US Weekly Petroleum …
25th November 2015
While there has been much media coverage of the recent falls in oil and copper prices, the simultaneous slide in the prices of lead and zinc has not been so well documented. In this Metals & Mining Watch , we explore the underlying fundamentals of the two …
China’s rare earth (REE) trade data show that exports were up 104% in the first ten months of 2015 compared to the same period a year earlier as the removal of export quotas and tariffs continued to boost external demand. … China’s REE trade data show …
Alumina prices are strongly influenced by aluminium prices, as demand for aluminium constitutes the bulk of demand for alumina. Since we expect aluminium prices to recover only slowly, alumina prices are also likely to remain subdued. … Any recovery in …
US and Chinese steel prices have continued to fall due to overcapacity and strong exports from China. However, the US government has begun to impose anti-dumping duties and Chinese output should fall further next year, so we still expect prices to rise by …
24th November 2015
Whilst the current oversupply in the oil market has received the most media attention, excess production, despite the recent price falls, is a common theme across all energy commodities. In addition, negative sentiment towards commodities in general, as …
Figures released today by Brazil’s Sugarcane Industry Association, UNICA, show that 25.6 million tonnes of cane were harvested in the first half of November in the main South-Central cane-growing region. This was 11% higher than in the same period last …
The recent slump in industrial commodity prices can largely be attributed to ample supply built up during the previous boom colliding with a sharp slowdown in demand. As such, it can be seen as the reverse of the upswing in the super-cycle driven by …
23rd November 2015
China’s imports of platinum group metals (PGMs) weakened in October but car production and the gold/platinum price ratio suggest that PGMs demand could soon improve. … China’s PGMs imports …
World Steel Association (WSA) data for October show that global steel output fell by 3.1% y/y, with declines in most major producing regions. World output has been down y/y in every month this year apart from January, but the fall in production has not …
20th November 2015
Prices of most industrial metals fell sharply this week, largely reflecting persistent investor concerns about the prospects for Chinese demand. The latest data showed LME money managers cutting their net-long positions and US investors increasing their …
This Update aims to provide some perspective on the recent slides in oil and copper prices and the new record lows for the Baltic Dry Index of global shipping costs. It includes a more positive view on the outlook for copper (and other industrial metals) …
The market sectors which consume the most rare earths (REEs) are also the ones where demand is expected to grow the most next year. As such, REE demand should strengthen further next year. … Outlook for sectoral REE demand is …
Changes in US weekly crude oil stocks are most influenced by variations in net crude imports, which are extremely volatile. This means it is difficult to make inferences about prices just by looking at the weekly headline number. However, the trend in …
According to the International Aluminium Institute, global aluminium output grew by almost 8% y/y in October. Excluding China, output rose by less than 4% y/y. … Global Aluminium Production …
Strong US employment data and statements from members of the Federal Reserve in recent weeks have combined to bring forward investors’ expectations for the first US rate hike to December. The resulting strengthening of the US dollar has been a factor …
19th November 2015
US stocks of crude oil ticked up only slightly last week, whilst stocks of gasoline edged up again as refineries continued to increase production. … US Weekly Petroleum Status …
18th November 2015
The prices of precious metals (PMs) have fallen sharply since mid-October. While expectations of a December hike by the Fed have been the biggest catalyst for moves in gold and silver prices, fears of a hard landing in China have driven platinum and …
Commodity prices have suffered since the middle of October, with the Bloomberg Commodities Index underperforming equities by a sizeable margin. The strong appreciation of the US dollar weighed heavily on prices, as markets brought forward their …
17th November 2015
Ample global supply of oil means that prices are no longer incorporating much of a risk premium. However, the potential for disruption is still high and lack of spare capacity mean that prices could spike in the event of any interruption to supply from …
Given prevailing market conditions, reports that Codelco has cut copper price premiums for 2016 sharply was hardly that surprising. We therefore think the negative market reaction has been overdone, particularly as the lower premium could actually …
Over the next few years, the price of silver should benefit further from governments’ increased focus on reducing global carbon dioxide emissions through investing in renewable energy. Solar energy is currently just a small portion of total silver demand …
After surging in early October due to a rise in Brazilian fuel prices, the world price for sugar has remained strong but volatile. Despite poor harvests in Brazil and the EU, further price rises this year will be limited by the weak Brazilian real, which …
16th November 2015
Last week’s slide in the price of crude oil has prompted us to lower our end-2015 forecasts, but we continue to expect a gradual recovery over the coming year. In particular, the latest news on global stocks and the prospects for demand are not as …
Prices of industrial commodities have taken a battering this week as investor sentiment continues to sour. While Chinese economic data painted a subdued picture of activity in October, in our view they did not constitute grounds for a renewed slump in …
13th November 2015
Weak producer currencies have supported coffee exports and weighed on US dollar prices. But with depleted inventories, we think a tighter market will put upward pressure on prices next year. … Coffee prices likely to perk …
Growth in demand for oil should remain strong over the next few years, despite concerns about slower growth in emerging economies. However, in the long term demand will be constrained by improvements in efficiency, fuel switching and lower subsidies, …
A deluge of Chinese data this week has coincided with a renewed slump in most metals prices. However, while the headlines have focused on the negatives, our interpretation of the data is that the Chinese economy was broadly stable in October, with some …
US crude oil stocks jumped as production rose again and net imports rebounded. However, demand also recovered as refineries continued to ramp production back up. … US Weekly Petroleum Status …
12th November 2015
In its latest World Demand Trends report, published today, the World Gold Council outlined an improving picture in Q3. Demand surged by 8% y/y during the quarter, as subdued prices encouraged buying by consumers and retail investors. Meanwhile, reduced …
OPEC’s oil production fell in October but remains well above target. Global inventories also remained very high. The market will still take some time to return to balance, with prices set to recover only gradually. … OPEC’s production falls, led by …
South Africa’s PGM production continued to fall in September as low prices are threatening miners’ profitability. Lonmin is just the latest example of an industry struggling to keep up with labour disruptions and weak prices. As such, we expect production …
With profits under pressure, aluminium producers outside China have recently campaigned for protectionist trade measures in an attempt to defend themselves against cheap Chinese imports. However, we think that these tactics are unlikely to be successful …
Ongoing declines in stocks of many LME metals have failed to prevent prices from falling further over the last month. Of course, stocks can be subject to manipulation and may not be an accurate representation of supply and demand but, if nothing else, …
11th November 2015
A sharp upward revision to Chinese corn stocks means that global end-year inventories are now expected to be at a record high. With a bloated global supply picture, we think further weakness in the prices of grains and soybeans is likely over the coming …
The price of copper is languishing below US$5,000 per tonne, undermined by negative sentiment towards commodities in general and concerns about demand from China in particular. Nonetheless, the fundamentals are actually starting to improve. It may take …
Data released earlier today by Malaysia’s Palm Oil Board show that palm oil production rose in October, helping to push inventories higher. … Malaysia Monthly Palm Oil Data …
