Filtered by Subscriptions: Commodities Use setting Commodities
The prices of most commodities across energy, metals and agriculturals rose this week. The common driver was investors dialling back their expectations of the aggressiveness of US monetary policy tightening , after data showed GDP contracted for a second …
29th July 2022
Overview – While non-energy commodities prices may fall a little further, we think the big move down in those prices is now behind us. Admittedly, the demand outlook has undeniably deteriorated in recent months, but many of the supply risks that prompted …
28th July 2022
Rising exports are becoming increasingly controversial There were large increases in both crude and product exports in the latest data, which will add fuel to lobbyists’ calls for restrictions on exports while prices are high . The EIA’s weekly US …
27th July 2022
The news today that Gazprom will further reduce its natural gas supply to Europe increases the likelihood of recessions in the euro-zone, UK and parts of Emerging Europe. It also supports our view that inflation pressures will be relatively persistent in …
26th July 2022
It was a more positive week for prices, in large part owing to some softness in the US dollar . Otherwise, the news was not particularly positive for prices given the ECB’s surprise decision to hike its policy rate by 50bp (having signalled 25bp), …
22nd July 2022
Production to remain sluggish this year Global steel production growth slowed in June as higher power costs in advanced economies contributed to lower output there. By contrast, the decline in China’s output slowed slightly. Overall, we expect global …
US commercial crude oil stocks looking fragile US commercial stocks fell last week, largely on the back of a rise in exports and a drop in imports. The fall came despite another bumper release from the strategic reserve. As those government stock …
20th July 2022
Supply growth to remain muted Global aluminium production ticked up again in June, but the increase was not sufficient to explain the plunge in prices last month. Base effects will mean that China’s production growth will accelerate in the second half of …
Although we doubt that they will fare quite as badly as they have in recent weeks, we still expect the energy and materials sectors of global stock markets to underperform over the next couple of years. Worries that high inflation, and the large interest …
19th July 2022
Europe’s heightened demand for LNG will be enough to keep prices high this year and into 2023, particularly as LNG supply growth will be fairly limited . The Asia-based spot price for LNG, together with its European counterpart (TTF), soared in the wake …
18th July 2022
Most commodity prices fell this week as global monetary tightening and fears about economic growth intensified . The high June inflation reading in the US nails on another large rate hike at the FOMC’s meeting in July. And central banks in Canada and …
15th July 2022
As metals prices soared early in the year, we cautioned that they would end the year lower owing to soft demand growth. Prices have since plunged. Now, we think they may have a little further to fall, before finding a floor as China’s demand moves up a …
Clear signs that high prices are weighing on demand Total crude stocks fell again, mainly due to ongoing sales from the strategic reserve. That said, the big news was hefty builds in petroleum product stocks, suggesting that high prices are finally …
13th July 2022
Commodity import volumes were generally weak in June . We think some of this reflects the lingering impact of lockdowns on demand, but it also points to subdued activity in heavy industry and construction. June may prove to be a low point for commodity …
OPEC looking more likely to scrap quotas from September OPEC unveiled its oil market forecasts for 2023 in its monthly report today. OPEC is more bullish than us on demand, forecasting an increase of 2.7m barrels per day. But even though it is also quite …
12th July 2022
After a period of extreme volatility, we expect the price of US natural gas to edge higher in the remainder of this year. Together, a rise in LNG exports and a pick-up in US consumption this winter will keep stocks low by past standards and underpin a …
11th July 2022
There was no clear direction in commodity prices this week, even within the same types of commodities. The takeaway is that commodity prices were dancing to their own tunes . Take energy, for example. Natural gas and coal prices rose on fears that Russia …
8th July 2022
US petroleum product demand to be seasonably soft US commercial crude stocks rose owing to a fall in net exports and lower inputs to refineries. For now, implied product demand remains in line with its seasonal norm, but we expect demand to be soft for …
7th July 2022
Overview – Non-energy commodities prices generally fell in June on the back of concerns about the outlook for demand amid global monetary tightening and slower economic growth. Energy prices may also fall a little from here, but constrained supply will …
6th July 2022
Prices struggled to find direction this week as concerns about demand deepened at a time of still constrained supply of many commodities . The price of Brent crude fell sharply on Thursday in response to US real spending data for May, which were weaker …
1st July 2022
We think that the recovery in China’s PMIs in June was driven by the lifting of virus-related restrictions rather than an improvement in underlying economic conditions. Accordingly, we think that softer growth in China’s activity will continue to weigh on …
We expect that the prices of agricultural commodities will fall back gradually over this year and next, but remain historically high. However, the volatility of prices in recent months and the uncertainty of the current environment mean there are major …
30th June 2022
Refinery constraints to put a floor under commercial crude oil stocks Commercial crude stocks fell last week as refineries raised production of petroleum products. However, refineries will probably struggle to raise output much further, with many of them …
29th June 2022
The G7 proposal to impose a cap on the price of Russian oil and gas would introduce new supply-side risks by potentially disrupting Russian energy supplies. This could push global energy prices up further, but for now we still see Brent crude prices …
28th June 2022
We think the prices of agricultural commodities will fall back in the coming months, but most will remain historically high owing to tight supply, concerns about future supply and high energy prices. Consumer food price inflation has been soaring in …
24th June 2022
Most commodity prices fell this week as demand concerns picked up due to ongoing monetary policy tightening by major central banks . Speaking to the US Senate Banking Committee on Wednesday, Federal Reserve Chair Jerome Powell underlined his “strong …
Whilst OPEC+ has been failing to meet its production quotas in recent months, it will technically finish unwinding its pandemic-related supply cuts come September. We think OPEC+ will then move to a more liberal approach and allow the few members with …
23rd June 2022
Steel production to remain lacklustre in 2022 Global steel production continued to pick up in May, led by higher output in India and China, which more than offset the ongoing decline in Europe’s production. The rise in input costs, efforts to curb carbon …
22nd June 2022
A threatened strike at Chile’s copper giant, Codelco, could knock as much as 0.3%-pts off quarterly GDP growth for every week that workers are on strike and worsen the country’s balance of payments strains. What’s more, it may not even be enough to give a …
21st June 2022
Supply is picking up, just as prices fall Global aluminium production has increased steadily since the start of the year in large part owing to a rebound in China’s output. At the same time, demand is relatively subdued, which suggests that aluminium …
20th June 2022
European natural gas prices surged this week on renewed supply concerns, as Russia once again cut gas supplies to Europe and the US Freeport LNG export facility closed for six months . The huge price move emphasises how volatile natural gas prices can be …
17th June 2022
Russia’s decision to once again cut supplies to Europe makes the region’s gas supply look increasingly precarious. The move will slow regional stock builds and keep prices historically high . Russia’s monopoly gas exporter, Gazprom, announced on Wednesday …
16th June 2022
Robust Chinese refined metal output, alongside subdued domestic demand, has combined with constrained refined output elsewhere to provide greater export opportunities for China. But there are limits on the extent to which Chinese metal can fill the …
High prices keeping a lid on demand Commercial crude stocks rose again this week, following another unusually large release from the strategic reserve. Meanwhile, implied product demand fell back as petroleum product prices remain very high. We’re …
15th June 2022
The closure of the Freeport LNG facility in the US, for up to six months, adds to concerns about Europe’s ability to fill its gas storage tanks ahead of winter. We always suspected that supply concerns would re-emerge this year and, as a result, we …
OPEC still seems optimistic on Russia’s output this year The gap between OPEC-10’s quota and output widened further in May, which adds weight to our view that the group will fail to fully unwind its production cuts by year-end. What’s more, whilst OPEC …
14th June 2022
The supply risks associated with the war in Ukraine have not gone away, but there has been more market attention in recent weeks on the outlook for commodities demand. In the very near term, the lockdowns in China weighed on both energy and, to a lesser …
10th June 2022
Softer demand for steel in Europe has dragged prices lower recently, despite production in the region being constrained by high production costs. We expect prices to fall a little further to €900 per tonne by end-year from around €950 currently . The war …
9th June 2022
Commodity import volumes revived a little in May, perhaps as virus-related restrictions started to ease. Although demand should pick up in tandem with activity as major cities re-open, we think that high prices and slower export growth will mean that …
Demand holding up, for now Commercial crude oil stocks rose this week owing to an unusually large release from the strategic reserve and a slump in crude exports. Interestingly, implied product demand ticked up, after being relatively subdued for a few …
8th June 2022
Overview – Energy and agricultural prices continued to rise in May as concerns about supply more than offset signs that demand, at least for energy, could soften. We expect prices to remain historically high but to start to ease back later in the year as …
7th June 2022
Despite a rise in May, China’s PMIs still point to weak Chinese demand, which will continue to weigh on industrial metals prices. However, the war in Ukraine will remain the bigger driver of energy prices. China’s official and Caixin manufacturing PMIs …
1st June 2022
Global refinery capacity is stretched with less of Russia’s capacity at work Slack should return if Russia re-routes some of its petroleum product exports But unplanned refinery outages will now remain a bigger risk to crude oil demand In this Energy …
31st May 2022
The EU’s sixth round of sanctions on Russia marks yet another defining moment in the West’s detachment from Russia’s energy trade. The sanctions were widely telegraphed in advance, though, so for now we still forecast that crude oil prices will remain …
Disruption to supply rather than strong demand has pushed prices higher Ample stocks and bearish financial market backdrop create potential for sharp price fall But the risk premia will be structurally higher in agricultural prices going forward The last …
A persistent theme in energy markets is uncertainty about the outlook for the EU’s imports of energy from Russia . It does appear that some sort of embargo of oil imports will be announced, maybe as early as next week. However, this is not new news and is …
27th May 2022
We expect China’s steel output to fall a little this year in line with government objectives. But we think that subdued demand, notably from the steel-intensive construction sector, will lead to lower prices for Chinese steel later in the year . The …
Commercial stocks to continue to lean on strategic reserves for support Commercial crude oil stocks fell again last week, but at a slower pace. Once again, lower net imports and higher refinery inputs led to the drawdown. Although both drivers became more …
25th May 2022
Steel production still depressed by high energy costs Global steel production fell in y/y terms in April, as all major producers bar India recorded declines. High energy costs and soft demand for steel are both likely to persist for much of the remainder …
24th May 2022
The recent tightening of export restrictions has been limiting the supply of staple agricultural commodities available to global markets and pushing up prices. In light of the ban on wheat exports from India, we’ve raised our forecast for the price of …
23rd May 2022
