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A resurgence in hydropower in China this year combined with the continued rapid expansion of its wind, solar and nuclear power capabilities may pave the way for 2024 to mark the start of a steady decline in China’s coal demand. But a contraction in demand …
10th April 2024
Wheat prices have been in decline for most of the past two years. We think that they are now near their trough, but the prospect of another good global harvest in 2024/25 means that we shouldn’t see a notable uptick in prices any time soon. Wheat prices …
9th April 2024
The prices of oil and gold increased sharply this week . The price of Brent rose to over $90 per barrel on fears that Iran could start to play a greater role in the Israel-Hamas conflict. And earlier in the week, OPEC+ reaffirmed its output restraint in …
5th April 2024
US steelmakers are preparing for robust growth in steel demand over the next few years, however we think those expectations will fall flat. Steel demand from property construction is likely to fall further and we expect softer demand for consumer durables …
Overview – We expect most commodity prices to fall over the next couple of years as greater supply enters the market. Industrial metals are the exception, China’s policymakers have stepped up stimulus in recent months and this should continue to support …
4th April 2024
China’s PMI surveys in March are consistent with some improvement in economic activity and solid commodities demand. We think that government stimulus will continue to boost economic activity in the coming months and in turn support the prices of most …
2nd April 2024
The collapse of the Francis Scott Key bridge in Baltimore this week is unlikely to have a large impact on global energy flows. For oil, flows of crude and refined products to or from Baltimore are tiny. More coal is exported from Baltimore, but the scale …
28th March 2024
Further attacks by Ukraine on Russia’s oil refining sector were the major driver of crude prices this week with the price of Brent remaining firmly above $85 per barrel. Reports that the US had urged Ukraine to halt the strikes may have tempered the price …
22nd March 2024
Production records a bright start to 2024 The robust increase in global steel production since the beginning of the year probably has a bit further to run since there are few signs that the two largest producers – China and India – will slow their supply …
China to drive output growth in coming months The drop in global aluminium production in February should be a blip now that output curbs in China’s Yunnan province due to power constraints have been lifted. According to the International Aluminium …
20th March 2024
It was generally a strong week for commodity prices despite the US dollar nudging higher. Oil prices rose by ~3% after the IEA revised its forecasts towards a tighter oil market and following the attacks by Ukraine on Russia’s oil refineries. While, in …
15th March 2024
We expect global crude production to rise by around 2.5% in 2025 as the unwinding of OPEC+ voluntary supply cuts stretches all through next year. But non-OPEC+ oil producing nations will also play their part in raising supply even if we think US oil …
14th March 2024
The winner of Russia’s election may be a foregone conclusion but the outlook for its oil and gas sector isn’t. A tightening of sanctions is an ever-present risk and the outcome of the war is uncertain. Our central case is that sanctions don’t prevent …
13th March 2024
We expect oil prices to edge lower in the second half of 2024 as OPEC+ starts to unwind its production cuts. However, the Israel-Hamas war, and associated risks to supply, will act as a floor under prices. Natural gas and coal prices will also fall owing …
12th March 2024
Oil prices have so far shrugged off disruptions to shipping in the Red Sea and the risk of wider conflict in the Middle East. Prices were supported by the OPEC+ decision to roll over production cuts until Q3. We expect that the group will gradually unwind …
11th March 2024
Industrial metals demand will recover this year, boosted by rate cuts and a bit of a recovery in economic growth in advanced economies. That said, recovering supply will cap price rises for some metals, such as aluminium and nickel. Policies outlined at …
8th March 2024
The rally in the spot price of gold this week to a new record high of over $2,170 per ounce was the result of several financial and macro drivers that should generally keep prices elevated over 2024. Investors grew more confident that the Fed would begin …
The preliminary China trade data released today suggest that China’s commodities demand was robust in the first two months of the year. Crude imports should stay elevated, but iron ore and coal imports may trend lower over the next few months. Growth in …
7th March 2024
China’s government is planning further fiscal loosening and hinting at rate cuts this year, with the aim of boosting economic activity. We think the policy backdrop is sufficient to support commodities demand this year, although for metals used in …
6th March 2024
Despite OPEC+’s decision to extend its voluntary production cuts until the end of June, we still forecast oil prices to drop back by end-2024. We continue to expect OPEC+ to raise output in the latter half of the year and other producers will plug the gap …
4th March 2024
The green transition will deal a significant blow to EM oil producers that have failed to save their windfalls (Nigeria, Colombia, Angola), but boost the export revenues of economies such as Chile and South Africa that are endowed with the raw materials …
Cut, cut, cut … oh no, we’ve lost market share According to reports, OPEC+ members will make a decision in the coming week on whether to extend their voluntary production cuts. A number of possibilities have been mooted, ranging from extending cuts for …
1st March 2024
China’s PMI surveys suggest that manufacturing activity held steady in February and are consistent with stable, if unexciting, growth in commodity demand. That said, we continue to expect a near-term pick-up in activity owing to policy support, which may …
We think that the gold price will rise in each of the next couple of years, driven by the Fed cutting rates a little quicker than is priced into markets, falling US Treasury yields and a softening US dollar. The gold price has taken a small leg-down since …
Although the US’ trade in electricity with Canada and Mexico is small compared to its overall energy trade, it should grow as clean energy capacity rises and grid connections improve. Canada should continue to be a net exporter as hydropower flows south …
28th February 2024
Given the signs that cyclical and structural forces will raise tin demand this year, set against a backdrop of tightening supply due to the mining ban in Myanmar, we forecast the tin price to rise in 2024. The tin price has, for the most part, been …
There was no clear direction to prices this week, but a number of individual commodities benefitted from producers announcing cuts to supply. First signs of a pull-back in US natural gas supply Having plummeted in recent weeks, the price of US natural gas …
23rd February 2024
Output falls slightly but doesn’t signal a downward trend The year-on-year contraction in global steel production in January masks a sizeable monthly increase in output in China and India. Production in both countries should grow further over the next few …
Carbon price not out of the woods yet …
22nd February 2024
This report is the third of a three-part mini-series that establishes a framework for assessing the outlook for the EU carbon price. It takes an in-depth look at the various factors that typically drive the EU carbon price in the short term. While supply …
This report is the second of a three-part mini-series that establishes a framework for assessing the outlook for the EU carbon price. It sets out our approach for modelling the fundamental price of an EU carbon permit [1] over the rest of this decade. In …
This report is the first of a three-part mini-series that establishes a framework for assessing the outlook for the EU carbon price. It starts by explaining what an emissions trading scheme (ETS) is and how the ETS has evolved since its introduction in …
Production growth to remain subdued in 2024 Global aluminium production was unchanged in January compared to December. This reinforces our view that production growth will soften this year. According to the International Aluminium Institute, global …
20th February 2024
The plunge in natural gas prices breathed some life into what was otherwise a relatively quiet week in commodity markets. Prices have fallen heavily in most major gas markets as stocks remain high for this time of the year. In the US, the House of …
16th February 2024
Higher aluminium prices and lower production costs should incentivise Europe’s smelters to restart some production in both 2024 and 2025. The introduction of CBAM in 2026 means prices will then probably trade at a premium to other regions, particularly as …
15th February 2024
The precipitous drop in US natural gas prices won’t persist for the rest of the year. Prices should rise by Q4 as US production growth slows and LNG exports rise. US natural gas prices have collapsed recently, falling around 18% week-on-week and 23% …
14th February 2024
The effects of El Niño will cause cocoa harvests in Côte d’Ivoire and Ghana, which account for more than half of global output, to fall by around 20% this year. But the related surge in cocoa prices means that, if anything, overall incomes are likely to …
We think the huge expansion in nickel supply will keep the market balance in a sizeable surplus this year. Accordingly, we don’t think the price will muster a recovery from its recent slump. The nickel price has been under consistent downward pressure …
12th February 2024
The price of cocoa was the star performer this week in commodity markets , rising by 16% on the week. The price has risen by 40% since the start of this year, on the back of consistently poor harvests in Côte d’Ivoire and Ghana. Meanwhile, conflict in the …
9th February 2024
After a sweet start to the year, sugar prices should take on a more sour note over the rest of 2024. Prices will fall back as El Niño comes to an end and the supply outlook improves but any relaxation of India’s sugar export curbs will only be modest. …
8th February 2024
Chile is frequently identified as one of the main beneficiaries of global efforts to put economies on a greener footing, but we doubt that the country will reap the full benefits of this trend. Chile is likely to struggle to substantially raise copper and …
6th February 2024
Oil prices are likely to remain buffeted by supply fears as long as the conflict in the Middle East continues. However, we think there will be support on the demand side later in the year as monetary policy in most major economies is loosened. By …
Energy prices have so far shrugged off disruptions to shipping in the Red Sea and the risk of wider conflict in the Middle East. If energy production continues to be largely unaffected, we expect most prices to fall further by the end of the year. Greater …
5th February 2024
We have revised down our forecast for US natural gas prices this year, as the outlook for domestic supply has improved. In the near term, a perfect storm of impediments to exports has emerged and sent spot prices tumbling. Henry Hub was down by over 20% …
2nd February 2024
Industrial metals demand will recover this year, boosted by rate cuts and stabilising economic growth in advanced economies. In addition, construction activity in China is robust and we think support for property developers will stabilise the sector and …
China's PMI surveys showed some signs of strengthening in January. But we still think they understate the strength of metals demand, which we expect to hold up fairly well this year. The latest China PMI surveys continue to tell slightly different …
1st February 2024
We forecast that global lithium demand will roughly double by 2025 (from 2022). But supply will increase at a slower pace, which is why we forecast that prices will rise. Demand for lithium has surged in recent years, from 50,000 tonnes per year in …
31st January 2024
Saudi Arabia has cut oil output significantly over the past year or so but that hasn’t prevented global oil prices from falling. Despite Aramco’s announcement today that it is postponing plans to raise production capacity to 13mn bpd, we think looming …
30th January 2024
JODI data on global oil and natural gas consumption paint a nuanced picture of global energy demand. While oil demand growth slowed towards the end of last year, consumption of natural gas was recovering from the worst of the energy price crisis. We …
29th January 2024
It was generally a positive week for commodity prices and particularly for industrial metals prices. (See Chart 1.) All major industrial metals finished the week higher, with gains in the region of ~5% for some such as tin and zinc. Chart 1: S&P GSCI …
26th January 2024