Prices to tread water for now

The prices of most commodities struggled in April against a backdrop of moribund global demand. That said, the performance of energy commodities was mixed: while Brent crude and Henry Hub gas rose in price, the other energy commodities fell. We think most commodity prices will remain depressed until global economic activity grinds back into gear.
Caroline Bain Chief Commodities Economist
Continue reading

More from Commodities

Commodities Weekly Wrap

Industrial slowdown in China a headwind for prices

The prices of most industrial commodities held up fairly well this week. However, the slowdown in broad credit growth and the fall in volume terms of China’s imports of industrial commodities in May suggests that commodity demand there is coming off the boil. This chimes with our view that industrial commodity prices will fall later this year as demand growth in China weakens even further. Turning to next week, the key data release for commodity markets will be China’s May activity and spending data (Wednesday). We suspect the data will show further evidence of an economic slowdown, which should weigh on commodity prices. Meanwhile, we expect the Fed to keep its policy settings unchanged at its meeting next week, but if the Fed continues to push back on market expectations for earlier rate hikes, then the US dollar could depreciate which could put a floor under prices.

11 June 2021

Commodities Update

Sugar no longer in a sweet spot

Even after accounting for a fall in Brazilian production and a rise in global demand, we still expect the size of the global sugar market surplus to increase in 2021/22, which will weigh on prices.

8 June 2021

Commodities Update

China’s iron and copper imports to fall further

China’s imports of industrial commodities, particularly iron ore and unwrought copper, eased back in May. We expect import volumes of both these commodities to fall further in the coming months as policy support continues to be gradually withdrawn.

7 June 2021

More from Caroline Bain

Commodities Update

China PMIs may be as good as it gets

The key takeaways from China’s May survey data are that while demand remains robust, supply shortages are leading to inventory drawdowns and price inflation. The data are broadly positive for commodity demand, but we think the withdrawal of fiscal stimulus will slow economic activity in the coming months.

1 June 2021

Industrial Metals Update

Calling time on the rally in US steel prices

Limited domestic supply, expensive imports and strong growth in demand have fuelled the rally in US steel prices. But with supply set to improve, at a time of softer growth in demand, prices should fall.

26 May 2021

Metals Data Response

Global Steel Production (Apr.)

Global steel production rose again in April as lower output in India, in particular, was offset by sizeable jumps in production in China, Russia and Brazil. For now, virus-containment measures remain a key driver of global supply, but high global prices mean that where they can, producers are raising output.

21 May 2021
↑ Back to top