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An unexpected spike in LME inventories in the last month has raised concerns about oversupply and contributed to a sharp drop in the price of zinc. However, stocks remain historically low and, with the concentrate market expected to tighten next year as …
30th September 2015
The platinum price is trading close to the lowest level in over six years in response to revelations that Volkswagen (VW) was not alone in cheating on emissions tests for its diesel cars in the US and Europe. While platinum demand could suffer if …
29th September 2015
Fears about China’s economy have dominated headlines in recent months and have been the main factor behind the weakness in commodity prices. We have argued in previous publications that most of these concerns are grossly overdone and that China’s economic …
China’s new national carbon cap-and-trade scheme constitutes yet another blow to the prospects for coal demand and prices. In contrast, lower production of steel, aluminium and some petroleum products could help to ease global surpluses and support their …
28th September 2015
Commodity markets ended the week on a stronger note, helped by comments from Fed Chair Janet Yellen . Even though she sent a pretty strong signal that US interest rates are still likely to be hiked later this year, she also played down concerns over the …
25th September 2015
Last week, Volkswagen (VW), the biggest European car maker, was engulfed in a scandal for using a hidden software to deceive American regulators when measuring emissions from its diesel-engine cars. Tests in Europe also appear to have been manipulated. …
On 10th September the Indian parliament approved the launch of the Gold Monetisation Scheme (GMS) and the Sovereign Gold Bond Scheme (SGBS). The GMS and the SGBS have been introduced in an attempt to reduce India’s ballooning gold imports by mobilising …
Data released today by Brazil’s Sugarcane Industry Association, UNICA, showed that sugar cane harvesting in Brazil’s main South-Central region was severely disrupted by rain in the first half of September. The amount of cane harvested fell to 29.6 million …
24th September 2015
This report is only available as a PDF. Click to download. … Can aluminium demand keep up with supply surge? …
Mainland China’s gold imports from Hong Kong continued to rise in August after a strong July. We expect total imports by China and India to pick up substantially in the remainder of the year as low prices and a lack of attractive investment alternatives …
Crude stocks fell and gasoline stocks increased in the US last week, despite a fall back in refinery rates and a jump in demand for oil products. … US Weekly Petroleum Status …
23rd September 2015
The proposal to cut the price paid to China’s corn farmers for state stockholding purchases is unlikely to be sufficient to tackle the country’s growing corn stocks. Indeed, we think further reforms will be necessary which could put downward pressure on …
Today’s weak manufacturing PMI reading from China has contributed to the negative sentiment towards commodities, but the data are not as disastrous as some of the headlines have implied. The euro-zone PMIs are holding up relatively well. … China & …
The latest data on China’s imports and exports do not paint a picture of a slump in domestic demand. But there are nuances, with imports of some metals holding up better than others. … China’s import data show some areas of …
22nd September 2015
The detailed Chinese import data show an easing of demand for many agricultural commodities in August. However, the bigger picture is that demand remains robust. … Chinese imports ease in August, but after a strong …
We think that coal prices will probably continue to decline over the next few years as demand is diminished by competing fuels and environmental concerns, especially in China. In addition, supply remains robust as major producers are insulated from the …
According to the International Aluminium Institute, global aluminium output grew by over 10%y/y in August. But excluding China, output rose by a mere 2% y/y. … Global Aluminium Production …
21st September 2015
The earthquake that hit Chile yesterday served as a reminder of the vulnerability of the copper market to disrupted mine output from key producing countries. With El Niño underway, persistent strike activity and some planned closures, copper mine supply …
18th September 2015
Commodity markets initially welcomed the US central bank’s decision to keep interest rates on hold on Thursday, but the mood soon cooled. Indeed, the Fed’s hesitancy only appears to have reinforced investors’ worries about the global economy, rather than …
The oil market is inundated with thousands of different statistics regarding production, consumption and trade on a daily basis. In this Update we pick five figures which we consider to be the most important, try to put them into context and provide our …
Commodity markets initially welcomed the US central bank’s decision to keep rates on hold yesterday, but the moves have been small. This makes sense, as rates are still likely to rise soon, and the delay could simply prolong the uncertainty. Worse still, …
With the market expected to fall into deficit in 2016, as supply falls and demand recovers, the price of nickel should rebound strongly. But the recovery may have to wait until stockpiles are drawn down. … Nickel prices to rally strongly next …
17th September 2015
Seven of the main agricultural commodities have seen prices fall since mid-August despite some softness in the US dollar which is normally considered supportive of dollar-priced commodities. Of the four crops that did see prices move higher, it was the …
Although the main commodity indices weakened further since mid-August, given the mid-summer volatility it has been a relativity calm last few weeks. Attention has now turned back to the US Fed although we continue to take a fairly relaxed view on the …
16th September 2015
Today’s report was full of surprises with crude oil stocks falling and gasoline stock surging. However, this was mainly driven by the return of some refineries from unexpected maintenance. … US Weekly Petroleum Status …
OPEC’s oil production appears to have levelled off in the last two months after surging earlier this year. But it will still take years for demand to catch up with supply and the market to rebalance. … OPEC expects to increase market …
15th September 2015
Falling official stocks are painting a much stronger picture of metals’ demand than current prices. Inventories of some metals, notably tin and lead, offer little in the way of a cushion if supply falters or demand picks up from here. … Stocks tell a …
The prices of precious metals (PMs) have fallen since mid-August as sentiment towards commodities in general continued to worsen, although performance was mixed. A further slump in Chinese equities and unexpectedly weak Chinese PMI numbers added to demand …
14th September 2015
The price of corn rallied late last week as the USDA cut its estimates of the US corn yield and global end-year stocks. But with high inventories likely to endure, we think prices will end the year lower. … Global corn & soybean inventories cut, but still …
US silver imports rose in June after a weak May, but exports of semi-manufactured silver slumped, suggesting weak industrial demand from the rest of the world. Meanwhile, retail appetite for physical silver remained strong in August as investors bought on …
A recovery in sentiment toward the Chinese economy lifted the prices of key industrial metals in the past week, although oil suffered from fears of further over-supply following the lifting of sanctions on Iran next year. The price of gold also struggled …
11th September 2015
The easing of sanctions on Iran will add to the supply of oil on world markets, but it should not be the game-changer for prices that some imagine. Instead, we think the more important factors will be fading worries about demand, particularly from China, …
US steel prices have fallen sharply this year, despite signs of robust physical demand. Given that imports have also dropped, we expect that stocks have been drawn down. Resilient demand coupled with the need to rebuild inventory should give a lift to …
A lack of rainfall in the key cocoa growing countries in West Africa has increased the risk of a poor harvest for the 2015/16 year, adding upside risks to the outlook for the price of cocoa. … Risks to the new cocoa harvest could keep prices …
A number of mining companies have recently announced plans to cut output or close mines and smelters in response to low prices. These latest announcements come on top of earlier cost-cutting exercises, including lower capital expenditure. In this Metals …
10th September 2015
US crude oil stocks rose again last week due to a combination of lower refinery inputs and still-high import volumes. … US Weekly Petroleum Status …
South Africa PGM production fell in July below the levels observed in 2012 and 2013 at this time of the year. Low prices are threatening miners’ profitability. As such, we expect production growth to continue to slow over the remainder of the year. … …
Data released earlier today by Malaysia’s Palm Oil Board show that crude palm oil production in August was the highest on record. Stocks also rose sharply again. … Malaysia Monthly Palm Oil Data …
Data released today by Brazil’s Sugarcane Industry Association, UNICA, revealed that the amount of sugar cane harvested in Brazil’s main sugar producing South-Central region in the second half of August was down slightly, by 0.4%, on the same period last …
9th September 2015
Buying by global central banks picked up pace in July, with China and Russia once again particularly active. Going forward, we expect further official purchases to be one of several factors supporting the price of gold in the next year or two. … World …
In its latest Platinum Quarterly report, published today, the World Platinum Investment Council (WPIC) depicted a challenging time for platinum in Q2. With the exception of investment demand, consumption of platinum weakened across all sectors while …
8th September 2015
China’s trade data took another turn for the worse in August but, in common with other recent economic indicators, the weakness was partly due to temporary factors and the numbers have yet to reflect the full impact of additional policy stimulus. We …
Persistently low prices mean that we have revised down our end-2015 and end-2016 forecasts for the price of US natural gas. However, we still expect prices to rise substantially over the next few years. … US natural gas prices set to …
7th September 2015
The prices of key industrial commodities, notably oil, have been relatively calm in the last few days, helped by the holidays that closed China’s equity markets. Nonetheless, the robust US employment report left investors feeling nervous that the Fed will …
4th September 2015
The performance of the major precious metals diverged sharply in August, with gold and platinum outperforming their sister metals, silver and palladium. A further slump in Chinese equities and unexpectedly weak Chinese PMI numbers added to demand concerns …
August proved to be another tough month for energy commodities with oil and coal prices slumping on worries about demand, prompted by the drop in the Chinese equity market. However, a further round of stimulus by Chinese policymakers helped oil prices to …
After falling steadily throughout August, in large part associated with a plunge in Chinese equities, the prices of most industrial metals have rallied in the last week. That said, the S&P GSCI industrial metals index has still slipped by nearly 10% since …
US crude oil stocks rose last week due to a combination of lower refinery inputs and higher imports, which was only partially offset by lower production … US Weekly Petroleum Status …
2nd September 2015
Mainland China’s gold imports from Hong Kong and Switzerland recovered in July after a weak June. We expect total imports by China and India to pick up in the second half of the year as low prices and a lack of attractive investment alternatives prompt …
At face value the recent weakness in commodity prices, culminating in August’s slump, is consistent with a global recession almost as severe as that in 2008-09. Investor sentiment towards the sector has also deteriorated even further. But while ample …
