Filtered by Subscriptions: Commodities Use setting Commodities
Hopes that the European Central Bank (ECB) will include gold on the list of assets to be purchased as part of a programme of full-blown quantitative easing (QE) will almost certainly be disappointed. There is a better chance, albeit still slim, that the …
19th November 2014
The next meeting of the Organisation of the Petroleum Exporting Countries (OPEC), on 27 th November, should be the most interesting since the change from individual quotas to a group target in early 2012. The recent sharp fall in oil prices has increased …
18th November 2014
On paper, copper mine supply should surge next year. But the copper mining industry has a long history of supply disruptions and we see no reason why these will not continue. This is one factor underpinning our expectation that copper prices will rally in …
14th November 2014
Additional proposed gas exports from Russia to China are unlikely to have a major impact on European gas prices. We see a greater threat arising from the potential long-term price impact of Europe’s diversification away from Russian supplies in the wake …
13th November 2014
The dip in the price of Brent below $80 per barrel in the last 24 hours is consistent with our long-held view that the world will soon be awash with oil. Indeed, global oil prices look set to hit $70 much sooner than even we had anticipated. … Brent …
The shift in the US political spectrum towards the Republicans could result in the restrictions on US oil exports being eased sooner than otherwise. However, the Republicans are likely to put most of their efforts into fighting the EPAs environmental …
11th November 2014
Global corn, wheat and soybeans remain on course for record harvests this year. Combined with high stocks, lower energy costs and a stronger US dollar, we continue to expect crop prices to fall further. … Lower production estimates won’t stop grain …
There were signs of a pick-up in copper imports in China’s October trade data, while iron ore and crude oil imports were still up strongly in year-on-year terms. However, exports of some refined raw materials also grew strongly last month, suggesting that …
10th November 2014
A new subsidy programme for Chinese cotton producers outside of Xinjiang province is unlikely to have a major impact on the market and we still expect the global price of cotton to fall. Nevertheless, the subsidy is likely to reduce some of the expected …
Concerns about demand, notably from China, have been one of the key factors cited by commentators to justify recent copper price falls. However, not all indicators of demand are flashing red. As such, we continue to expect steady growth in demand in 2015 …
7th November 2014
Although the price of US corn has fallen to levels last seen in early 2010, lower livestock numbers, limits on ethanol demand and lower international corn trade will prevent a large pick-up in demand. … Demand for US corn to remain weak despite falling …
5th November 2014
The recent unseasonably warm weather has given US natural gas companies additional time to boost stocks before heating demand picks up. However, the amount of gas in storage is still significantly lower than in previous years, which could result in a …
A sharp drop in the price of oil and the strength of the US dollar weighed on all commodity prices in October. Only the prices of those commodities with falling stocks or potential supply disruptions managed to make gains. … “A perfect storm” batters gold …
3rd November 2014
Talk of a collapse in the gold price is overblown (or at least out of date). The price of gold has arguably held up rather better in recent weeks than many might have anticipated, given the general strength of the dollar. One possible catalyst for a …
The deal between Russia and Ukraine should ensure that gas supplies flow freely to Europe this winter and should also reduce the geopolitical risk premium currently in European gas and coal prices. … Russia & Ukraine opt for treaties over …
31st October 2014
Nickel prices have been in freefall since mid-2014 as, contrary to consensus expectations, the market has been comfortably supplied and stocks have been rising. We think this situation will prove temporary and that a supply shortfall will emerge in 2015, …
29th October 2014
Amid reports that Russia’s autumn-sown crop is heading into winter in worse condition than five years ago, which preceded a slump in output and saw global wheat prices double, we caution against comparing the situation now and the events of 2009-10. With …
The current slump in coal prices is unlikely to lead to a significant fall in coal production over the next year. Instead, output should continue to grow, just at a slower pace than in recent years. … Coal output will still increase, but at a slower …
28th October 2014
We doubt that the recent fall in oil prices will have a significant impact on oil production over the next few years. The vast majority of global oil production, including US shale oil, is still economically viable with oil prices at current levels or …
27th October 2014
Growth in global steel production, even in China, has started to slow suggesting that the much-needed rationalisation of the sector has begun. However, it is likely to be a slow process. This is one reason why we retain our forecast that US steel prices …
Notwithstanding the possibility of consecutive weather-damaged harvests in Brazil, given the combination of this year’s fall in Brazilian output in advance of an “off” year, and pressure on stocks as the market moves into deficit, we think the market will …
24th October 2014
The recent sharp fall in oil prices should make it easier for governments in developing countries to reduce oil subsidies without dramatically increasing inflation. Meanwhile, a reduction in oil subsidies is likely to keep demand for oil subdued over the …
23rd October 2014
While China’s headline flash PMI rose in October, falls in the activity and new orders components do not bode well for commodities prices. Meanwhile, the euro-zone’s flash PMI suggests the region continues to teeter on the brink of recession. … PMIs …
Lead prices have fallen this year, in large part owing to slower demand growth in emerging economies. However, supply prospects (both mined and refined) are deteriorating and official stocks are low so that even if demand growth remains subdued, prices …
22nd October 2014
The hype about a supposed “super-cycle” at the start of the decade has been replaced by fears of a prolonged period of “secular stagnation” in commodity prices. As usual, the reality lies somewhere in between. We therefore believe that market sentiment …
20th October 2014
We think that the recent sharp falls in oil prices have more to do with increased production than a collapse in global demand. As such prices may rebound a little this year, as the worst fears about demand prove unfounded, before falling again in 2015 and …
17th October 2014
For the third time since 2013 the price of gold has found decent support at around $1,200 per ounce. That level might be tested again soon, as fears over the global economy fade and the focus returns to the prospect of tighter monetary policy in the US. …
The outlook for global grain and soybean production received another boost late last week as the United States Department of Agriculture (USDA) further increased its estimates for the 2014/15 harvest. Rising production and high stocks have helped corn, …
13th October 2014
The recovery in China’s commodity imports last month was mainly driven by an increase in processing and re-exports, rather than stronger domestic demand. Indeed, the weakness in China’s property sector is likely to keep domestic demand for commodities …
Slower economic growth in China and the EU, combined with active efforts by these regions and the US to move away from coal power, have caused coal prices to slump dramatically over the last few months. However, some analysts have argued that emerging …
10th October 2014
The LME’s warehousing reforms should facilitate access to metal from its warehouses, a factor that was creating artificial tightness in the aluminium market last year. However, the market has moved on since the reforms were proposed and implementation of …
We continue to expect the copper price to fall further in the fourth quarter but this forecast is premised on strong supply growth rather than a sharp drop in demand. Indeed, if supply disappoints, then the recent falls in price could be reversed sooner …
8th October 2014
There are several reasons why OPEC members in general – and Saudi Arabia in particular – are likely to be sanguine about the recent slump in the price of oil. Output will therefore continue to respond to the state of demand rather than be manipulated in …
7th October 2014
Aside from cocoa, the outbreak of the Ebola virus in West Africa has not yet had a significant impact on commodity prices. The main reason is that the three most affected countries – Guinea, Liberia and Sierra Leone – are not large commodity exporters, …
6th October 2014
Lower stocks of natural gas in the US compared to this time last year make it more likely that there will be a repeat of the price spikes seen last winter. However, even if this winter is mild, we still expect prices to trend upwards over the next few …
2nd October 2014
Almost all commodity prices fell in September, largely in response to the strength of the US dollar and, in many cases, a strong supply outlook. Signs of slower Chinese and euro-zone economic growth in Q3 were additional factors depressing prices. … US …
1st October 2014
The potential restart of Russian gas sales to Ukraine is a positive step in relations between the two countries and should help to put downward pressure on the prices of European gas and coal. However, the agreement still needs to be ratified by both …
29th September 2014
Palladium prices rose strongly for much of 2014 as rising concerns about supply attracted investor interest. In the last month, however, investors have been selling. In our view, solid demand growth coupled with uncertain supply should put a floor under …
26th September 2014
Like many agricultural commodities, sugar has seen a price rout as earlier concerns over supply have evaporated. Despite the benchmark ISA sugar price being nearly 18% below its 2014 mid-May peak, we think that further falls lie ahead. … Sugar prices to …
This weekend’s protests about climate change and yesterday’s UN summit are just the latest signs that the issue of climate change is being taken more seriously again. Whilst any sort of meaningful global deal next year is still unlikely, individual action …
24th September 2014
Disappointing growth in demand at a time of high stocks is weighing on the price of platinum. Weexpect lower prices to encourage some buying, notably of jewellery, but a sustained recovery is onlylikely when stocks are depleted, possibly some time next …
The recent slide in the Bloomberg index of spot commodity prices to its lowest level since 2010 has caught the attention of many commentators. But the underlying picture is far more nuanced than the headlines might suggest and it is actually encouraging, …
23rd September 2014
The increase in the flash PMI for China has helped to assuage fears about a hard landing. However, the index is still low by historical standards and the fall in the euro-zone’s flash PMI highlights the risk to commodity demand from Europe. … …
Indonesia appears to be exercising its power as the world’s largest tin exporter, withholding shipments when prices are low. However, with only subdued growth in demand, there is a risk that other exporters or producers can fill the gap without the need …
19th September 2014
Zinc prices have started to fall in recent weeks. Whilst acknowledging that the market was set to tighten in 2015, we had felt the recent rally was premature. However, the scale of mine closures planned for 2015-16 coupled with sound demand prospects …
18th September 2014
Rising global temperatures are often assumed to be unambiguously negative for the output of agricultural commodities. However, while there is plenty of debate about the causes and impacts of climate change, even among those who agree it is happening, …
17th September 2014
The general economic uncertainty created by a “yes” vote in Scotland’s independence referendum could hamper investment in the oil and gas sector too. Nonetheless, an independent Scottish government would have a greater incentive to create a favourable …
16th September 2014
The price of major grains and soybeans are at near five-year lows thanks in part to another large upward revision in the USDA’s expectations for global crop output. However, assuming there is no severe adverse weather over the next month, we still think …
15th September 2014
Unusually, both base and precious metals prices have fallen this week. The common factor appears tobe the strength of the dollar and the prospect of imminent US monetary tightening. In our view, this isa knee-jerk reaction by markets that, in some cases, …
12th September 2014
Some of the factors that have dragged the price of Brent crude below $100 per barrel may prove temporary, notably the weakness of European demand. Saudi Arabia might also cut output again in an attempt to stabilise the market. Nonetheless, the big picture …
11th September 2014
