Filtered by Subscriptions: Commodities Use setting Commodities
It’s been a mixed week for commodity prices. Industrial metals price generally struggled as activity surveys for China paint a grim picture of demand . (See Chart 1.) We suspect prices will tread water over the rest of the year as Chinese fiscal …
4th August 2023
The outlook for global agricultural supply has deteriorated since the start of the year as a result of extreme weather, the end of the Black Sea Grain Initiative, the prospect of an El Niño weather event and rising agricultural protectionism. We have …
Saudi Arabia’s announcement yesterday that it would extend its unilateral oil production cut of 1m bpd into September sent the Brent crude oil price climbing to $85 per barrel, where it remains today. We think the price will remain at around this level …
We think the price of rice is set to climb after India’s additional rice export restrictions have exacerbated global shortage concerns. For now, though, we don’t expect other major producers to follow suit. India recently tightened rice export …
1st August 2023
China’s PMIs suggest that commodities demand has come completely off the boil. For the recent rally in industrial metals prices to be sustained, China’s policymakers will have to deliver on promises of stimulus. In continuing a recent theme, the official …
The message from electric vehicle sales data is now clear: the EV revolution is alive and kicking and poses important implications for oil demand. We are slightly more optimistic on the pace of EV adoption than other forecasters and suspect the drag on …
31st July 2023
Most commodity prices rose this week on hopes of Chinese fiscal stimulus and a “soft landing” in developed markets. That said, a stronger US dollar later in the week meant that the prices of precious metals fell w/w. The star performer, however, was the …
28th July 2023
Global growth in steel output stagnating Global steel production growth picked up in June, albeit only to a pace consistent with stagnant growth. With the rise in output in China on shaky ground and weak demand beginning to weigh on supply in other …
25th July 2023
In a week when the US dollar strengthened and the 2-year US Treasury yield rose, agricultural and energy commodity prices still climbed on the back of supply concerns. In the case of agriculturals, those relate to Russia pulling out of the Black Sea Grain …
21st July 2023
Aluminium production remains strong but growth is softening Global aluminium production growth eased again in June, in a sign that smelters are responding to weak demand growth. We think that production growth will remain subdued over the next few months …
20th July 2023
China’s recent announcement of export restrictions on two metals used to make semiconductors serves as a reminder that China dominates production of metals needed for the green transition. We have warned in the past that the green transition is unlikely …
While the wholesale European natural gas price is now close to pre-energy crisis levels again, we don’t expect EU gas consumption to rise in response. Rather, we think that EU gas consumption has structurally fallen. This is the main reason why we think …
The widely-differing impact of El Niño across continents means that the net effect on global mining output is not clear cut. On balance, though, the likelihood is that it will lead to lower ore output, particularly of copper, and that it will be a factor …
18th July 2023
For the most part, commodity prices rose this week. A weaker US dollar in the wake of a lower-than-expected June CPI reading in the US was a key factor boosting prices. Not surprisingly, the prices of the precious metals rose sharply (1) . Chart 1: US …
14th July 2023
El Niño is coming but the picture is more nuanced than one of doom and gloom for global production of all crop types. For corn, soybeans, wheat and rice, larger harvests in some regions can outweigh declines in others. For prices, there are still upside …
China’s commodity import volumes remained high in June, helped by the economic re-opening, but they were held back by softening input-related demand for the manufacture of goods for export. As economies in Europe and the US flirt with recession, this will …
13th July 2023
Not so long ago, a higher 10-year TIPS yield almost invariably meant an underperformance of US “growth” stocks vis-à-vis their “value” peers, a lower gold price, and a stronger dollar. That’s changed in 2023, though, with the relationships weakening …
The spot price of Asia LNG should trade at a premium to Europe’s TTF gas at end-2023 given stronger demand growth in Asia and the fact that LNG is more costly to produce. The spot price of liquefied natural gas (LNG) in Asia has periodically moved …
12th July 2023
The likelihood of an El Niño event in the second half of this year adds to upside risks to global inflation and downside risks to activity. For the advanced economies, higher prices of agricultural commodities could slow the decline in food inflation. But …
Despite the flurry of macro data, it was a relatively quiet week for most commodity prices. Generally, a slight weakening in the US dollar, on net, contributed to small price rises. Oil market deficit just got deeper Oil prices were among the largest …
7th July 2023
How will the combination of El Niño and human-driven global warming affect commodities and economic performance over the short and long term? … El Niño – Macro, policy and market …
Expectations of fiscal stimulus in China have thrown previously floundering copper prices a lifeline. If policymakers go ahead, that may keep a floor under prices before a turnaround in construction in China and accelerating electric vehicle rollouts …
5th July 2023
After fluctuating between $500 and $600 per 1,000 board feet for most of this year, we expect the US lumber price to fall from around $520 today to $475 by the end of the year due to weaker demand. The key risk to our forecast is that concern grows about …
We recently held a Drop-in titled “Industry’s decarbonisation challenge – From aviation to property”, which you can view on-demand here . This Update addresses some of the questions we received during the event, including those that we did not have time …
3rd July 2023
China’s PMI aren’t consistent with some of the worst fears around China’s reopening recovery and weak commodities demand. But neither are they positive enough to warrant the boost to prices, such as steel, last month. For that, hopes of fiscal stimulus …
There wasn’t a consistent direction to commodity prices this week. Natural gas prices in Europe and Asia rose (1) , indicating stronger competition for LNG cargos. Meanwhile, most industrial metals prices fell due to pessimism around the outlook for …
30th June 2023
Overview – We expect most commodity prices to struggle this year against a backdrop of a stronger dollar and deteriorating investor risk appetite. Energy-related commodities will be the exception. We expect prices to tick up later in the year owing to …
29th June 2023
With the Fed still hinting at more interest rate increases, the dollar strengthened and contributed to declines across most commodity prices this week. One of the few prices that did increase was the Asia LNG price, which rose by 7% (1) . This seems …
23rd June 2023
If the weather forecasters are right, El Niño conditions have arrived in the Pacific and are set to build over the next few months. The negative impact on agricultural production will depend upon the strength and duration of these conditions but sugar, …
Note: We’re holding a 20-minute briefing on the challenges that aviation and other key industries face in decarbonising at 10:00 EDT/15:00 BST on Thursday, 29th June. Register now . Despite jet fuel being a fairly small share of total oil consumption, …
21st June 2023
Steel mills slamming the brakes on production Global steel production fell sharply in y/y terms in May. Against the backdrop of subdued demand and stringent supply caps in China, the supply outlook over the next few months appears bleak. According to the …
Aluminium production growth could start to pick up soon If reports of a forthcoming easing of output restrictions in Yunnan province are accurate, then the ongoing slowdown in China’s aluminium production growth could come to an end soon. Much will also …
20th June 2023
We think that the lead price will struggle over the next few months as high interest rates weigh on new vehicle (and lead-acid battery) demand growth and new supply comes online in Australia and Germany. Heading into 2024, we think that the shift to …
19th June 2023
Most prices rose this week (1) , helped by a weaker dollar, stronger-than expected US retail sales in May and interest rate cuts by the People’s Bank of China. Natural gas prices rose particularly sharply due to a number of unrelated disruptions to …
16th June 2023
The latest OPEC oil market report confirms that OPEC countries implemented a fresh round of voluntary production cuts in May, slashing the group’s crude output by 0.4m bpd. Similar to OPEC’s own view on the oil market, we think that it will tighten …
13th June 2023
The latest OPEC oil market report confirms that OPEC countries implemented a fresh round of voluntary production cuts in May, slashing the group’s crude output by 0.4m bpd. Similar to OPEC’s own view on the oil market, we think that it will tighten later …
Having fallen steadily for much of the last year, European natural gas prices surged last week. The catalyst was constrained supply. Given seasonally high stocks and subdued demand, we are not worried yet about another price spike. But Europe has to avoid …
12th June 2023
The oil price ended the week flat despite Saudi Arabia pledging to cut output by 1m bpd in July at the OPEC+ meeting last weekend. Most other commodity prices rose, supported by China’s May trade data which showed strong growth in most commodity imports. …
9th June 2023
Preventing large-scale leaks of methane from Turkmenistan’s creaking infrastructure would be a welcome sign of emissions-cutting efforts broadening out from carbon dioxide to include other harmful greenhouse gases too. But while Turkmenistan has become …
8th June 2023
Overview – Most commodity prices have moved lower over the past month as concerns about demand loomed large and the US dollar strengthened. We think that prices will continue to struggle over the next few months, but energy and metals prices should rise …
7th June 2023
Growth in China’s commodity imports generally was strong in May, with a notable rise in crude oil imports. While the data are consistent with our above-consensus outlook for China’s growth this year, a note of caution needs to be applied. Export demand …
Oil output will be more constrained in the second half of this year if the OPEC+ members stick to their recently-announced production quotas. However, we have also raised our forecast of Russian production given the persistent strength in its exports. As …
5th June 2023
It was a week of two halves, with prices initially falling before the passage of the US debt ceiling bill and a strong US May employment report saw prices recoup some of those losses later in the week. Attention is now turning towards the OPEC+ meeting in …
2nd June 2023
US product demand remains resilient Oil prices surged on the back of this week’s report, which managed to successfully tear investors’ attention away from the upcoming OPEC+ meeting this weekend. In isolation, there was little to suggest this was a …
1st June 2023
OPEC+ is unlikely to change its output target at the meeting this Sunday. After all, crude supply is already constrained, but prices have fallen on demand concerns. Accordingly, it is unlikely that further cuts would prompt a large rebound in prices. …
China’s PMI surveys suggest that the economic recovery is ongoing, but the pace of growth has slowed. While a lower reading for construction activity is a negative for metals prices, the persistent strength of the services sector is consistent with our …
Commodity prices generally fell this week, as investors’ expectations for the Federal Reserve’s policy rate rose on concern about the persistence of high inflation. The dollar also strengthened. Declines in many equity indices also pointed to a risk-off …
26th May 2023
China’s refineries pumped out more oil products than at any point in their history in the first four months of this year. This is perhaps not too surprising given that the removal of COVID-19 restrictions was always going to give a boost in demand. But a …
25th May 2023
The aviation sector is pinning its hopes on sustainable aviation fuel to help cut its carbon footprint over the coming decades. But any ramp-up in biofuel usage would pit aviation against the needs of other sectors and industry officials are becoming more …
The long-awaited inclusion of WTI Midland into Dated Brent is now taking place in a gradual month-long process that started on 2 nd May. The inclusion of Midland could be a factor weighing on the Brent-WTI price spread in the coming months, but we …
24th May 2023
