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Three macro developments should continue to set the tone for industrial commodity prices in the coming months. The end of the euro-zone recession is only a small positive, while the prospect that the Fed will soon start to taper its asset purchases should …
14th August 2013
We think that the prices of US grains and soybeans are still higher than can be sustained by fundamentals, despite the sharp falls last month. … Grain and soybean prices still have further to …
12th August 2013
Despite the introduction of a new support scheme for coffee farmers in Brazil, we expect the price of arabica coffee to fall from around 120 US cents per lb today to 100 by the end of 2014. This is mainly due to weak demand from developed countries and …
9th August 2013
After a year of being pitifully weak, China’s commodity imports rose rapidly in July, in many cases to record highs. This has sparked a rally in commodity prices but we doubt this will be sustained. … China’s commodity imports surge …
8th August 2013
Shale oil and gas has transformed the energy outlook in the US. However, the impact on the rest of the world has been negligible so far. Other countries are finding it difficult to replicate the technology and incentives used in the US. This means it may …
7th August 2013
We think that the proposed ban on exporting cobalt concentrates by the largest producing country, the Democratic Republic of Congo (DRC), will be deferred again at the end of this year. As a result, supply will continue to outstrip demand and cobalt …
The price of uranium is at a seven-year low but we forecast that it will increase from $36.50/lb today to $50 by the end of 2014, and to $60 in 2015. The key drivers are likely to be a recovery in Japanese demand and, in the long term, the construction of …
2nd August 2013
Supply factors played a key role in the movement of many commodity prices in July. Most importantly, the price of WTI has risen towards the price of the global benchmark, Brent crude, as logistical constraints eased. In contrast, rising production saw …
1st August 2013
Commodities are extending their generally poor performance into a third successive year. Concerns about the early withdrawal of monetary stimulus at least are overdone, even though there may still be another bout of nerves when the Fed does start to taper …
26th July 2013
Flash PMIs for China and the euro-zone, released this morning, have continued to diverge. China’s manufacturing index fell unexpectedly to its lowest level since last August, but the euro-zone equivalent hit a 24-month high. However, the prospect of …
24th July 2013
The analyst consensus is that the price of silver is likely to outperform that of gold as both continue to recover in the next year or so. We are nudging our gold price forecasts higher today in the light of the rebound so far this month. However, silver …
22nd July 2013
The recent swings in the price of natural gas in the US have mainly been caused by the unusually cold spring. The bigger picture is that higher demand from utilities and manufacturers and lower production due to high costs should continue to push the …
15th July 2013
We expect the price of US soybeans to decline gradually over the summer as exports from South America pick up. They may then fall more rapidly by the end of the year as a large supply of crops from the US harvest is likely to come onto the market. … …
12th July 2013
China’s commodity imports were stronger than overall trade in June, but were still weak in the first half of 2013 overall. What’s more, China is shifting to a lower and less commodity-intensive growth path over the next few years. … China’s commodity …
10th July 2013
Oil prices have been lifted again by hopes of stronger demand and fears of disruption in the Middle East, but we do not expect these supports to be sustained. Ample supply against a backdrop of still sluggish global activity should drag oil prices lower …
The falls in US grain prices over the last month were largely due to better weather which allowed farmers to finish planting. The extremely wet spring had supported prices due to fears that late plantings would harm yields. However, the additional …
8th July 2013
The collapse in the differential between the prices of Brent crude and West Texas Intermediate (WTI) primarily reflects the prospect of a further easing of the logistical constraints that have been holding back the traditional US benchmark. This spread …
4th July 2013
The relative resilience of oil prices in the face of worries about US monetary policy and the health of China’s economy suggest that $100 will act as a floor for the price of a barrel of Brent for a while longer, especially given the additional support …
3rd July 2013
Commodity prices mostly fell further in June, with gold being hit particularly hard by (premature) fears of an early end to the support from global monetary policy. Industrial commodities were also undermined by the deteriorating outlook for Chinese …
1st July 2013
The recent slump in the price of gold to less than $1,200 per ounce – which regrettably we failed to predict – has prompted us to take a more cautious view of the prospects for the precious metal. Indeed, there is little on the immediate horizon to …
28th June 2013
US President Obama’s speech on climate change policy yesterday contained little new. Nonetheless, it highlights the downward pressures on coal prices already coming from environmental policy, increased competition from natural gas, a weak global recovery …
26th June 2013
Poor Chinese manufacturing data and the prospect that US monetary policy may soon be less supportive have more than offset signs that the recession in the euro-zone is easing. Of these developments, subdued Chinese demand is the greatest threat to the …
20th June 2013
We expect the reduction in the floor price the Thai government will pay rice farmers to increase private exports and sales from government stocks, putting further downward pressure on prices. … Rice price to continue to fall as Thailand reduces …
19th June 2013
Traditional methods of calculating copper demand have been suggesting that Chinese consumption is actually falling. However, these estimates of “apparent consumption” are distorted by changes in unreported stocks, which can be very large. We would give …
17th June 2013
Fears that Western intervention in Syria could increase the risks of a broader Middle East conflict have already put some upward pressure on the price of Brent crude. However, even if tensions do continue to rise (which all the major players would want to …
The prospect of a reduction in US monetary stimulus has already begun to undermine the prices of many risky assets, from developed market equities to emerging market currencies. However, this prospect should be less of a threat to the prices of industrial …
11th June 2013
The jump in China’s imports of major commodities on a month on month basis in May was probably flattered by the easing of earlier port delays. Other incoming economic data suggest that demand remains soft. … China's underlying demand still …
10th June 2013
US lumber prices have fallen sharply over the last couple of months after what, with hindsight, looks like an earlier overshoot. Nonetheless, we expect prices to climb again over the rest of the year. … Correction in lumber prices should prove …
6th June 2013
Signs of stronger growth in the US have failed to boost commodities, due in part to the likelihood that the Fed will start to scale back its asset purchases under QE3 sooner than it might otherwise have done and to the support that this has provided to …
3rd June 2013
We think that the price of aluminium is unlikely to be able to sustain moves much outside the range of $1,800 to $2,100 per tonne over the next year or two, due to the potential supply responses in either direction. These figures are at the low end of …
31st May 2013
The twice-yearly OPEC meeting in Vienna tomorrow is likely to confirm the official production target of 30m barrels per day. But the bigger picture is that the cartel now ranks no higher than a distant fourth in the list of factors determining global oil …
30th May 2013
The recent strength in US soybean prices has been driven by fears of tight supplies as congestion at Brazilian ports delays exports. However, as the logistical problems ease and planting of the new crop in the US progresses, prices should resume their …
28th May 2013
The sub-50 reading for China’s flash manufacturing PMI today shows the fragility of the underlying demand for industrial commodities, including copper and oil, as the economic slowdown there deepens. Meanwhile, although the euro-zone manufacturing PMI …
23rd May 2013
Global copper mine output is on track to rise rapidly for a second successive year, despite a recent landslide and a tragic tunnel collapse at two of the world’s largest mines (Bingham Canyon and Grasberg respectively). In turn, higher production should …
21st May 2013
The persistent weakness in the Baltic Dry Index (BDI) is still primarily a reflection of the surge in the supply of cargo ships over the last few years. Demand for transporting dry bulk commodities has continued to rise, albeit at a slower rate. …
16th May 2013
Anglo American Platinum’s decision to scale back its planned production cuts mean that the global platinum industry is better supplied than had appeared likely. We suspect that further mine closures will thus be necessary to cause prices to rally from the …
14th May 2013
Projections of record global crop production in 2013/14 by the United States Department of Agriculture have been the trigger for renewed weakness in the prices of US grains and oilseeds. We had expected prices to drop as supply improves and think they …
13th May 2013
There are three main reasons why further monetary stimulus, including quantitative easing (QE), is likely to benefit equities more than it benefits the prices of industrial commodities, including crude oil and base metals. In summary, industrial …
Brazil is unlikely to meet its ambitious targets for oil production, but crude output could still increase by at least one million barrels per day from current levels by 2020. This would add to booming global supply from both conventional and new sources …
9th May 2013
We estimate that the volume of China’s commodity imports rose y/y for the first time this year in April. But looking beyond the positive headlines, the figures were artificially boosted by calendar effects, with underlying demand still at low levels. … …
8th May 2013
The recent rally in the price of US grains has been driven by renewed fears over supply. However, we think that these concerns are overstated and expect prices to resume their downward trend over 2013. … Grain price rally set to be short …
3rd May 2013
The prices of most major commodities fell in April due to growing concerns about the health of the global economy (and the early signs are that this weakness is continuing, for much the same reasons, into May). In particular, Brent crude dropped below the …
1st May 2013
The price of crude has recovered a little in the last few days, but hopes of a significant boost from a further loosening in global monetary policy are overdone. We are also sceptical of assertions that the recent weakness in prices is simply a seasonal …
30th April 2013
The recent slump in the prices of most commodities mainly reflects worries about the near-term outlook for economic activity, rather than any deterioration in financial conditions. We expect global growth to stay subdued, with hopes of a sustained …
25th April 2013
Concerns about the potential impact of the end of quantitative easing ebb and flow, but we remain relatively sanguine. Detailed market forecasts will follow shortly in our quarterly publications, The Capital Markets Analyst and Commodities Analyst. …
23rd April 2013
The decline in the flash manufacturing PMIs for China and the euro-zone in April, published today, triggered fresh falls in industrial commodity prices, sending copper to an 18-month low. We think that this weakness in demand will persist and that rising …
In the light of the recent sharp falls in many commodity prices, it is worth reiterating our scepticism on the durability of the “super-cycle” and on the scope for further support from China. … Where do we stand on China and the …
18th April 2013
The recent weakness supports our view that oil prices have been unsustainably high given the fragility of the global economic recovery. Over the next few years we continue to expect $100 to become a ceiling for Brent, rather than the floor that many …
16th April 2013
The trigger for the slump in the gold price since Friday appears to have been aggressive selling by speculative traders, rather than any change in the fundamental drivers. Gold has also been caught up in the broad-based weakness in commodity markets, …
15th April 2013
The gold market was hit yesterday both by the prospect of an early end to the Fed’s quantitative easing and by speculation that Cyprus could be the first of the troubled euro-zone countries to sell official reserves to ease their financial problems. The …
11th April 2013
