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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 …
23rd September 2015
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 …
Commodity prices continue to ebb and flow at the whim of movements in Chinese equity prices and concerns about a “hard landing” for the economy. Although agricultural prices don’t have the same level of correlation with the performance of the Chinese …
The price of gold is vulnerable to one last dip if, as we anticipate, the Fed presses ahead with a first hike in US interest rates soon. We have reflected this risk in our end-Q3 forecast of $1,050 per ounce (compared with a current price of $1,142). But …
1st September 2015
The relief rally in Chinese equities prompted by additional policy stimulus has turned global sentiment around, but a sustained recovery in commodity prices will probably require hard evidence that the Chinese economy is picking up again. Fortunately, …
28th August 2015
Chinese import demand has been a key factorshaping agricultural commodity prices over thepast decade or more. Recently the NationalDevelopment and Reform Commission (NDRC)and the Ministry of Agriculture have indicatedthat they will allow the market to …
Indonesia, the world’s top exporter of tin, has introduced new regulations on the production and shipping of the solder metal. On their own, the new controls are unlikely to boost prices, but they could be a contributory factor leading to a tighter market …
27th August 2015
US stocks of crude oil fell sharply last week, but stocks of gasoline rose, despite more US refiners being offline for maintenance. … US Weekly Petroleum Status …
26th August 2015
Investor sentiment towards commodities has rarely – if ever – been more negative. However, the recent sharp falls in prices can largely be seen as the continuation of trends in place since 2011. The main difference is that oil, previously an outlier, has …
Exchange stocks of copper remain high and have risen strongly since the start of 2015. However, stocks of other metals, notably tin and lead, are now at very low levels on a historical basis. This may be one factor supporting a rebound in prices later …
25th August 2015
The price of US lumber has continued to fall since early June. But with single family unit starts andindustry confidence strengthening, we think that the price of lumber will end the year higher. … The price of US lumber set for strong …
We think that OPEC will remain steadfast in its policy of maintaining high output, despite the renewed slump in oil prices and the potential return of exports from Iran. … OPEC to resist calls to cut …
