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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, …
13th November 2015
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 …
Figures released today by Brazil’s Sugarcane Industry Association, UNICA, show that 38.4 million tonnes of cane were harvested in the second half of October in the main South-Central cane-growing region. This was 11% higher than in the same period last …
10th November 2015
Demand for cobalt looks set to grow rapidly for the foreseeable future given its use in rechargeable batteries. But the supply outlook is deteriorating, suggesting scope for prices to rally strongly. … Cobalt supply unlikely to keep pace with …
Whilst the latest revisions to China’s coal demand statistics raise more questions about the reliability of official data, we don’t think they change the big picture of falling coal demand and weaker prices. … What do China’s statistical revisions mean …
The recently-vetoed Keystone XL pipeline would have provided a relatively cheap means for Canadian producers to transport oil to refineries in the US where it could be processed for sale. As such, the veto of the project is probably positive for oil …
9th November 2015
US exports of semi-manufactured silver remained subdued in August, suggesting that global industrial demand is yet to recover. Meanwhile, investors continued to buy into falling prices, boosting demand for coins. … US silver imports and exports …
While the headlines have focused on the falls in export and import values, China’s trade data actually show commodity import volumes holding up well. What’s more, the record trade surplus will support the value of the renminbi, limiting the risk of higher …
In the wake of the strong US employment report we are reinstating the dips in gold and silver priceswe had previously forecast for the end of Q3. Nonetheless, we continue to expect both metals torecover in 2016, once the markets have adjusted to the …
6th November 2015
The recent weakness in the price of gold has coincided with a surge in the price of bitcoin, prompting a few to suggest that the electronic currency is again challenging the precious metal as a credible investment. We don’t believe this for a moment, but …
The end of China’s one-child policy raises a number of questions about future demand for agricultural commodities. However, we think that economic growth and rising incomes will remain the key determinants shaping China’s food demand over the medium term. …
Global central banks increased their gold reserves in September, 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. … …
Under pressure from labour unrest, rising costs and weak platinum prices, Lonmin said this week that it will cease trading if its plan to raise capital in a rights issue of new shares is unsuccessful. While at face value any disruption to supply may be …
5th November 2015
Indonesia’s tin exports rose strongly in October, but we expect volumes to drop sharply from November as new export regulations take effect. Lower Indonesian production and exports next year should be factors boosting the price of tin. … Indonesia Tin …
US crude oil stocks rose once again last week. However, despite an increase in crude production, the stock build was much smaller than the previous week’s, as refinery inputs continued to pick up and oil imports fell back. … US Weekly Petroleum Status …
4th November 2015
The performance of the major precious metals continued to diverge in October. While the platinum price was buoyed by strong euro-zone auto sales, gold and silver prices remained tied to the expectations of the first rate hike by the US Fed. Fears of a …
As changing weather forecasts in key growing regions shape markets’ expectations for production, some sharp price increases in October saw investors rush to reduce their short futures positions. By the middle of last month, the total number of short …
Volatility returned to the oil market in October with prices being pushed and pulled by swings in sentiment towards China, changes in the value of the dollar and the outlook for demand in the US. The natural gas market has now fully turned its attention …
Many metals markets have been in comfortable surplus this year, which has been a factor weighing on prices. However, in October there were signs that supply cuts in response to low prices are starting to come through. This will help set the stage for a …
3rd November 2015
Dollar strength and fears about demand, particularly from China, continued to overshadow commodity markets last month, but the biggest moves in prices can largely be explained by supply-side developments. Worries about the impact of bad weather boosted …
2nd November 2015
Aluminium prices have continued their rapid decline, reaching a six-year low. Production has still not responded to lower prices though, and Chinese output is growing particularly strongly. Therefore, despite good demand, we expect prices to recover only …
Recent positive developments in China – including signs of recovery in the equity market and in themanufacturing sector, renewed stability in the renminbi, and additional policy stimulus – support ourview that the tide may be about to turn for industrial …
The key drivers of commodity prices in the past week have been the ebb and flow of expectations for US interest rates and speculation of tighter supply – the latter boosting US crude oil prices and key agricultural products in particular. However, ample …
30th October 2015
With El Niño threatening to reduce rice harvests in South-east Asia and the world stocks-to-consumption ratio expected to hit the lowest level since 2006, we think rice prices will move higher. … El Niño to keep rice prices on the …
With the Australian Bureau of Meteorology indicating that the current El Niño could see a marked decline during the first quarter of next year, there is a significant risk that La Niña could develop during the next Northern Hemisphere growing season. In …
High stocks and forecasts of a mild winter have driven down US natural gas prices recently, but given slowing production growth, rising demand and the unpredictability of the weather, we think that prices should rise over the next year. … US gas market …
Silver’s prospects remain closely tied to those of gold, with expectations for US monetary policy the biggest catalyst for changes in prices recently. The upside for silver has also been capped by weak fabrication demand and the softness of industrial …
29th October 2015
Scheduled closure of some large depleted mines coupled with producer cutbacks in response to low prevailing prices will lead to a relative shortage of zinc concentrates and will curb the recent strength in China’s refined zinc output. The market is likely …
With the possibility of this year’s strong El Niño tightening supplies in the months ahead, we now think that the price of palm oil is likely to rise as we move into next year. … Price of palm oil to rise as El Niño hits …
28th October 2015
US crude oil stocks rose for the fifth consecutive time last week, but the latest increase was less than half the previous week’s as net crude oil imports fell and inputs to refineries rebounded strongly. … US Weekly Petroleum Status …
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 …
27th October 2015
The conventional wisdom is that the outlook for US interest rates will be critical in determining the prospects for commodity prices over the next few years. Indeed, some commentators seem to base their forecasts (particularly for gold) solely on their …
Fossil fuels should continue to be the world’s most important energy source for the foreseeable future. However, renewable energy production will grow rapidly and become an increasingly large part of global energy production. Coal is likely to be more …
Low rare earths (REE) prices seem to be pushing up China’s exports as previously-delayed purchases are ramped up. However, recent pledges by a number of Chinese REE producers that they would smelt less ore than their allocated quotas this year bolster our …
Mainland China’s gold imports from Hong Kong rose in September for the third consecutive month. We expect total imports by China to continue their upward trend in the remainder of the year and imports by India to pick up too, as low prices and a lack of …
The mood in commodity markets soured once more in the past week, with any positive developments outweighed by the negatives, including renewed US dollar strength, OPEC disunity, high US oil stocks and other evidence of ample supply (from coffee to iron …
23rd October 2015
The oil market is inundated with thousands of different statistics regarding production, consumption and trade on a daily basis. In this Energy Watch we pick five figures which we consider to be the most important, try to put them into context and …
Data released today by Brazil’s Sugarcane Industry Association, UNICA, showed that the volume of cane harvested in Brazil’s main South-Central region fell to 36.1 million tonnes, from 40.5 million in the second half of September. This was 8% lower than …
The ongoing ramp up in supply and ever-lower cash costs at the major producers suggest that the iron ore market will remain well supplied. With subdued steel demand and output, we expect prices to fall further from here. However, somewhat stronger iron …
Data on Asia’s cocoa grindings revealed a 1.6% y/y decline in Q3, the fifth consecutive y/y fall. This follows data released last week which showed a decrease in overall European and North American grindings. … Asia Cocoa Grindings …
Production cuts in the copper and zinc industries will also translate into lower silver supply over the next few years. We expect silver output to be broadly flat in 2015 and to fall by 3% in 2016, underpinning our longer-term positive view on prices. … …
