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Another week of record stock levels and production will disappoint those hoping that last week’s surge in prices was the start of a new bull market. However, the rate of growth of stocks and output is showing signs of slowing. … US Weekly Petroleum Status …
11th February 2015
In spite of higher forecast demand, the USDA has also revised up its estimates of year-end stocks for corn and wheat. And with ample soybean supplies, we continue to expect prices of all three to fall. … Higher demand can’t offset rise in …
Stock movements, in general, continue to tell us more about the attractiveness of holding commodity assets off-market rather than anything about underlying physical demand. However, low official stocks are an additional factor supporting our view that the …
10th February 2015
Oversupply in the oil market will probably continue until demand picks up and US oil production growth begins to ease off in the summer. This will limit the upside for prices in the coming months. … Oil glut likely to continue in the first half of …
2014 was the fourth successive year of poor performance by commodities, especially relative to bonds and equities, but we believe 2015 will be the year when many finally turn the corner. The recent slump in oil prices was a long overdue correction that …
9th February 2015
The price of US wheat posted its first weekly rise since mid-December last week, rallying close to 5%. However, with ample global supplies, we think this rise will prove to be temporary. … Lift in wheat price is not the start of an upward …
While China’s commodity import volumes dipped in January, they are still holding up. With the exception of coal, the latest data underpin our expectation that China’s commodity imports will continue to grow this year albeit at a slower pace. … China’s …
Oil prices have rebounded by over 20% in the last week during a period of highly volatile trading. The rally was sparked by growing evidence of declining US rig counts and multiple announcements of capital spending cuts by oil firms. This prompted short …
6th February 2015
If nothing else changes, earlier hikes in interest rates by the US central bank would be likely to undermine the prices of precious metals, notably gold and silver. The 2% fall in the gold price after the strong US employment report today underlines the …
Abundant supplies of many agricultural commodities and concerns about weak demand are likely to be behind the general deterioration in sentiment towards agriculturals in recent weeks. Indeed, there has been a strong shift down in the futures curves for …
Indonesia’s efforts to dictate the tin market look increasingly futile as China finds a new source of tin ore and lifts domestic refined production. However, despite the changing dynamics, the bigger picture is still of a relatively tight market, which …
5th February 2015
The amount of oil being put into storage in the US shows little sign of levelling off as weak consumption, high output and arbitrage activity all add to demand for storage. … US Weekly Petroleum Status …
4th February 2015
While the price of gold may well rise further when inflation is high than when it is low, periods of deflation can also be positive for the precious metal. This is because of the financial and economic instability that deflation can cause, and the …
European gas prices have been under downward pressure since early 2014. Given the plunge in oil prices, plentiful LNG supplies and high storage levels, prices should continue to fall in 2015. … European gas prices set to …
We expect the price of sugar to remain close to its current level this year due to the continuing glut on the world market. A decision by India to re-introduce export subsidies would push the global sugar price down further. … Risks to the price of sugar …
Given the significant headwinds – a strengthening US dollar, slower growth in China’s industrial sector and the collapse in oil prices – metals prices held their ground well in January. The two notable exceptions were copper and iron ore. … Metals prove …
Commodity prices stabilised towards the end of January after sharp falls in oil and copper earlier in the month. The strength of the US dollar and concerns about global growth remain significant headwinds. But precious metals have continued their strong …
2nd February 2015
Whether or not Greece ultimately exits the euro, we expect the price of gold to be boosted further this year by the return of safe-haven demand as the country’s financial problems drag on. … Gold to benefit from revival of Grexit …
30th January 2015
Solid demand growth coupled with rapidly deteriorating mine supply prospects suggest zinc prices are set to rise in 2015-16. However, the potential for the release of unofficial stocks and restarts of mines in China could act as constraints on prices. … …
The copper price has continued to tumble this week. We suspect this is due to financial factors rather than underlying fundamentals. The copper market’s high liquidity has made it vulnerable to negative investor sentiment towards commodities sparked by …
Opportunistic buying supported strong growth in Chinese imports of many industrial commodities in 2014. We expect this trend to continue this year, supporting prices. … Bargain hunting to boost China’s commodity imports in …
The aluminium market remains dysfunctional, as high stocks struggle to find their way onto the market, leading to elevated price premiums. Supply into the physical market should improve this year, pushing down premiums, although benchmark prices will …
29th January 2015
Given ample global wheat supplies we don’t expect Ukraine’s announcement that it will limit wheat exports over the next six months to have much of an impact on the market. We therefore continue to forecast the price of wheat to fall. … Ukraine’s move to …
Today’s data show a further surge in US crude oil stocks as traders continue to store oil to take advantage of high futures prices. … US Weekly Petroleum Status …
28th January 2015
The fall in the platinum price in H2 2014 has made the metal look increasingly good value. We expect strong growth in jewellery demand, notably in Asia, the release of some pent-up demand for new cars in Europe, and additional stockbuilding , to lead to …
The slump in oil prices over the last six months has vindicated the bearish view we have held for several years. Our central forecast is that the price of Brent will recover to $60 per barrel by the end of this year, from around $49 today, as supply and …
The surge in US stocks of oil in the last few weeks has been driven at least in part by attempts to arbitrage low spot prices with higher futures ones. This should support prices over the next few months but the eventual selling of these stocks will help …
27th January 2015
Stronger economic growth in the US and rising wages should provide a platform for a rebound in the number of housing starts this year, boosting the price of lumber. … Outlook for US homebuilding is positive for …
26th January 2015
The latest quarterly production reports by the large iron ore producers demonstrate a continued commitment to ramp up supply, despite the nearly 50% drop in iron ore prices last year. In this Metals & Mining Watch we discuss the key demand and supply …
The European Central Bank’s decision to launch a large-scale programme of government bond purchases under quantitative easing (QE) is unlikely to provide a major boost to the prices of global commodities – even gold. Developments in emerging economies are …
23rd January 2015
The S&P GSCI Agriculture Commodity Price Index has begun 2015 the same way it finished 2014 – on a downward path. The index has fallen 4% since the start of the year, dragged down by a near 10% drop in the price of wheat. Moreover, the majority of …
An environment of rising gold prices and improving sentiment towards the global economy should see the price of silver out-perform its fellow precious metal. We are raising our forecasts for silver from $20 to $23 per ounce for end-2015 and from $23 to …
Falling cocoa grindings in Europe, North America and Asia suggest that the world has lost some of its sweet tooth. We expect weaker demand and ample supply to push the price of cocoa lower. … Weak demand to push the price of cocoa …
The flash PMIs for China, the euro-zone and Japan all rose in January. Admittedly, the increases were small, but signs of stronger domestic growth in China and a stabilisation in the euro-zone economy, combined with the launch of QE by the ECB should all …
The lead price has mirrored falls in copper in recent months. Whilst demand growth is set to remain unspectacular in 2015, and sentiment may be weak, recent and impending mine closures will provide a crucial boost to the market in coming months. … Mine …
22nd January 2015
The European Central Bank’s decision to launch a large-scale programme of government bond purchases under quantitative easing (QE) is unlikely to provide a major boost to the prices of global commodities – even gold. But the impact should still be …
Today’s data provide further evidence that traders are stockpiling US crude to take advantage of the difference between low spot prices and higher future ones. … US Weekly Petroleum Status …
The fall in the number of rigs drilling for oil in the US is the latest sign that firms are beginning to respond to the collapse in oil prices by cutting back on investment. However, we expect US oil output to continue rising for at least the next few …
21st January 2015
The continued recovery in the gold price to $1,300 per ounce today means that it has already hit our (relatively bullish) target for the end of this year. Looking ahead, one big unknown is the market responses to monetary easing by the ECB and to early …
Recent weakness in US steel prices has mainly been driven by supply-side factors, not least Chinese supplies flooding the world market, as well as lower input prices. Considering the protectionist nature of the US steel industry, combined with healthy …
20th January 2015
The resilience of gold in the face of a surging dollar and collapsing oil price supports our view that the precious metal will recover further this year and next. The prospects for silver look brighter too. … Will gold’s strong start to 2015 be …
14th January 2015
World soybean production remains on track for a record harvest and is set to exceed consumption for the third year in a row. With stock levels and the consumption-to-stocks ratio rising, we expect soybean prices to fall. Similarly, ample global supplies …
13th January 2015
The latest Chinese trade data show a rebound in most commodity imports in December, led by oil. While some buying was probably opportunistic, taking advantage of lower prices, the data also support our view that fears of a sharp downturn in Chinese …
Precious metals mining in South Africa is in long-term decline and lower prices are undermining profitability. Although the country’s near-monopoly on global platinum and palladium reserves suggests that output will be maintained, supply disruption at …
8th January 2015
There is no compelling reason why oil prices cannot fall further in the near term, but the current market panic looks increasingly overdone. Other commodity prices have held up relatively well. We therefore continue to expect Brent to average around $60 …
6th January 2015
Commodity prices finished 2014 on a downbeat note as a further sharp drop in the price of oil and the strength of the US dollar continued to weigh on all commodity prices. … December brings little cheer for …
5th January 2015
Despite the recent weather-related fall in the price of US natural gas, we still expect prices to trend upwards over the next few years due to higher demand both at home and from overseas. … Fall in US natural gas prices likely to be …
23rd December 2014
The fall in oil prices has raised concerns about oil majors’ ability to service debts accumulated during the good times. Risks are concentrated in Latin America, but there is plenty that both companies and governments can do to contain the wider economic …
22nd December 2014
The fall in oil prices is likely to have significant implications for all commodity producers and consumers, not just those in the oil industry. We have explored the impact of falling oil prices on commodities in general in earlier pieces. (See our …
19th December 2014
As a major exporter of wheat, any measures imposed by Russia to keep more supplies at home arelikely to result in higher global prices, though current market conditions should limit the upside. Atrifecta of issues could see a perfect storm for higher …
18th December 2014
