Global Steel Production (Oct.)

Global steel production contracted again in y/y terms in October, mainly owing to lower Chinese production. China’s output may rebound a little in the coming months as power rationing has come to an end, but weaker domestic demand will act as a disincentive.
Caroline Bain Chief Commodities Economist
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Global Aluminium Production (Dec.)

Although global aluminium output fell in y/y terms in December, it still grew strongly over 2021. The lifting of power restrictions in China has helped increase global output despite a reduction in European output resulting from energy shortages. Looking ahead, we expect a slowdown in Chinese construction activity to weigh on aluminium prices in 2022.

20 January 2022

Industrial Metals Update

Slower growth in China to drag on prices in 2022

While high power prices and low stocks will support prices in the near term, we think that prices will pull back in the second half of 2022 as Chinese economic activity slows further and supply improves. Drop-In: Neil Shearing will host an online panel of our senior economists to answer your questions and update on macro and markets this Thursday, 13th January (11:00 ET/16:00 GMT). Register for the latest on everything from Omicron to the Fed to our key calls for 2022. Registration here.

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Metals Data Response

Global Steel Production (Nov.)

Global steel production contracted in y/y terms in November, mainly owing to depressed output in China. Although China’s power rationing came to an end last month, there are no signs of an upturn in steel supply. Given our expectation that construction-related steel demand will remain subdued, a sustained rebound in China’s steel production appears unlikely in the coming months.

22 December 2021

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Energy Data Response

US Weekly Petroleum Status Report

The latest weekly data show falling crude and petroleum product inventories and a jump in implied demand. The strength in demand is somewhat surprising given the rise in gasoline prices, but we suspect that demand will ease back in the coming weeks as the price rise bites.

17 November 2021

Energy Focus

Lessons from the EU’s carbon permit market

This year, the EU announced reforms to its Emissions Trading Scheme (ETS) which, if introduced, would boost the price of each carbon permit and ultimately help the bloc to rapidly reduce its greenhouse gas emissions. In the first of a two-part Focus series, we explain the lessons that other countries can learn from the EU’s experience of an ETS. In the second Focus, we will analyse the implications of these new reforms and initiate coverage of the European carbon permit price.

10 November 2021

Commodities Weekly Wrap

Energy to remain in the spotlight

It is perhaps too soon to call the end of the energy price rally, but the prices of European natural gas and Chinese coal took a tumble this week as supply fears were, at least partially, allayed. What’s more, the recent surge in oil prices stalled. Energy commodities will remain in focus next week with the start of the COP26 climate change summit in Glasgow on Sunday and the monthly meeting of OPEC+ on Thursday. Any major COP26 announcements on reducing the role of fossil fuels will have implications for our long-run energy demand and price forecasts. However, the outcome of the OPEC+ meeting is likely to have more of an impact on current oil prices. Despite mounting political pressure (from the US, India and Japan), we think that OPEC+ is likely to stick with its current target of raising output by 400,000 bpd per month until the end of the year. This decision may offer some support to prices, but it will not come as a major surprise. Elsewhere, China is set to publish its October PMIs early in the week which we expect to be little changed from September. Therefore, they are unlikely to move industrial commodity prices.

29 October 2021
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