Palladium outlook brightest once auto sector rebounds

The well-documented shortages of semiconductors have slammed the brakes on global vehicle production. As a result, the near-term prospects for platinum group metals (PGMs) demand in autocatalysts have been dented. It is only once a meaningful recovery in auto output takes hold that demand for PGMs will pick up once again. But the likelihood is that semiconductor shortages rumble on for a while longer yet.
Kieran Tompkins Assistant Economist
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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.

13 January 2022

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

Industrial Metals Update

Drawdown in stocks to reverse in 2022

Exchange stocks of base metals have fallen this year, as supply was interrupted by power rationing in China as well as the ongoing effects of COVID-19. However, now that power restrictions have been lifted, and with Chinese construction activity continuing to weaken, we expect stocks to start to build which should weigh on prices in the coming year.

21 December 2021

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Precious Metals Update

Dim outlook for the silver price

We think that weaker physical demand, higher real US Treasury yields and a stronger dollar will mean that the recent poor performance of the silver price is set to continue over the next couple of years.

7 October 2021

UK Economics Weekly

Shortages threatening to stifle the recovery

The list of anecdotal reports of labour and product shortages has grown ever longer in the past week and pose two major risks to the economy. First, that the near-term recovery will be slower than we expect. Second, that if they persist for longer than we suspect then inflation might not drop back to 2.0% in late-2022. These dual risks of slower GDP growth and higher inflation sound like a gentle whisper of stagflation.

27 August 2021

UK Data Response

IHS Markit/CIPS Flash PMIs (Aug.)

The chunky fall in the composite activity PMI suggests that the economy struggled to gain fresh momentum in August despite the apparent easing of the “pingdemic” and the final relaxation of all domestic COVID-19 restrictions.

23 August 2021
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