Filtered by Subscriptions: Commodities Use setting Commodities
Energy and precious metal prices will remain volatile while there is a risk that the war between Israel and Hamas expands to include other countries in the region. For now, energy supplies have been largely uninterrupted, and prices should remain close to …
3rd November 2023
Oil prices continued to fall this week, perhaps reflecting less concern that the Israel-Hamas conflict will expand to other countries in the region and that Middle East oil supply will be negatively affected. Consistent with this, the price of gold fell …
Energy prices will remain historically high over the remainder of this year. The Israel-Hamas conflict has increased volatility in energy markets, but supply has not been disrupted. Oil prices will remain high as OPEC+ output cuts keep supply constrained. …
The underperformance of wind and solar equities since early 2021 has largely been driven by higher interest rates, which disproportionately affect the cost of renewables projects. But while the days of ultra-low financing costs are behind us, our …
2nd November 2023
The PMI surveys released so far for China weakened in October with the manufacturing PMIs falling back into contractionary territory. We think China’s demand for commodities will be supported by further fiscal stimulus over the next few months, but a …
1st November 2023
The conflict between Israel and Hamas continued to drive commodity prices this week. Oil prices fell back while gold prices defied the stronger dollar and held steady. Elsewhere, forecasts of cold weather sent US natural gas prices soaring. (See Chart …
27th October 2023
We think the cautious oil market reaction to the outbreak of conflict in Israel probably reflects the huge uncertainty about the eventual outcome, but also a somewhat lower “Middle East” risk premium. For context, the Brent crude oil price has risen by …
26th October 2023
The war between Hamas and Israel – and the potential for escalation to the wider region – has increased the uncertainty around the economic and financial market outlook, but in most scenarios is unlikely to generate a sustained hit to major asset markets. …
EU natural gas prices have risen in recent weeks highlighting that a reliance on LNG imports is not without risk. That said, prices should fall back next year as a significant amount of LNG export capacity comes online, first in the US and then in Qatar. …
25th October 2023
Argentina’s oil and gas production growth has slowed sharply recently due to pipeline capacity constraints. New projects should ease these bottlenecks, and production should rise from 2024. Admittedly, the expected increases in output are not large enough …
Further falls in global steel supply are likely Monthly global steel output in September fell in year-on-year terms for the first time in 2023, in large part due to a contraction in China’s production. With demand set to remain weak and low profitability …
24th October 2023
It was generally a strong week for commodity prices as mounting geopolitical tensions boosted the oil price. In turn, higher oil prices put upward pressure on most agricultural prices. (See Chart 1.) Chart 1: Price Changes (%, w/w) Source: Refinitiv …
20th October 2023
Robust supply growth, but it is mostly a China story After reaching a record high in August, global aluminium production eased back in September but remained strong. Given that demand growth is relatively subdued, the increase in global supply may only …
2023 is on track to be the warmest year on record, but somewhat ominously the headwinds to the green transition have strengthened this year. Some of these will prove temporary, particularly as short-term policy interest rates start to come down. That …
19th October 2023
After several years in a post-Fukushima wilderness, nuclear power’s ability to provide low-emission and reliable electricity generation has slowly brought it back into favour around the world. Several countries, particularly in Asia, are likely to bring …
The reported deal that is close to being reached to lift US sanctions on Venezuela’s oil sector in return for competitive elections would help to raise the country’s oil output from very depressed levels. But the sector requires enormous investment to …
16th October 2023
It was a mixed week for prices, with energy, agricultural and precious metals outperforming industrial metals. (See Chart 1.) Chart 1: S&P GSCI Sub Indices (3 rd Apr. 2023 = 100) Source: Refinitiv Capital Economics Energy prices rose on the back of the …
13th October 2023
Cobalt is likely to keep its position as a leading battery metal for years to come, but its high cost compared to alternative metals means that cobalt demand won’t grow as fast as overall battery production. This is a key reason why we think that the …
China imported fewer key commodities in September than in August, but its underlying demand for commodities, especially fossil fuels, remains strong and is only likely to strengthen from here. China’s preliminary trade data, released today , showed m/m …
The conflict between Hamas and Israel will negatively affect Israel’s natural gas exports. However, the bigger concern for global natural gas prices is the risk of the conflict spreading. The European natural gas price has risen by about 30% w/w to €48 …
12th October 2023
China’s recent commodity demand has been stronger than might have been expected given the weakness of its economy and commodity-intensive property sector in particular. This partly reflects a step-up in infrastructure spending and resilience in …
The price of wheat and corn will stay historically high for now, as Russia’s withdrawal from the Black Sea Grain Initiative has re-ignited concerns about supply from Ukraine. We think that prices will drift lower into 2025 as supply from other producers …
11th October 2023
Note: We discussed the outlook for oil prices and the geo-economics around the conflict between Israel and Hamas in a Drop-In on 9th October. Click here to watch the recording. First and foremost, the renewed fighting between Hamas and Israel since the …
9th October 2023
The attack by Hamas on Israel on Saturday has led to widespread casualties and deaths, and the declaration of war by Israel’s prime minister. From an economic perspective, the experience from the 2014 Gaza war suggests that the effects on Israel’s economy …
It has been a week of declines for most commodity prices, as commodities were caught up in the more widespread selling of financial assets. (See Chart 1.) Chart 1: S&P GSCI and US 10Y Treasury Yield Sources: Refinitiv, Capital Economics Crude oil prices …
6th October 2023
The trend of rapid increases in industrial metals supply this year is likely to unwind over the next few years for copper, but we think nickel supply growth will remain robust. We think that divergence will be a key reason why the price of copper will …
5th October 2023
The sell-off in bond markets has taken a breather today, helped in part by softer data on the US labour market. However, the scale of the moves over the past week has invoked comparisons to previous financial crises that have been caused by sharp moves in …
4th October 2023
Strong production growth has helped to pull US natural gas prices below 2019 levels for most of this year. But prices should rise by the end of 2024 as production growth is set to ease and exports will surge when LNG export capacity rises by nearly a …
2nd October 2023
The latest above-50 readings in China’s PMIs are consistent with our view that China’s demand for commodities will remain solid in the second half of this year, but not grow strongly. The China PMIs released over the weekend pointed to fairly stable …
Our in-house metals demand proxies show that growth was subdued in mid-2023. There could be some pick-up in the coming months owing to additional Chinese infrastructure spending, but we think a more sustainable revival in global demand will only emerge in …
29th September 2023
There wasn’t a clear trend in commodity prices this week. Natural gas prices in the US and Europe were among the largest risers, though those increases appear to have been driven by dips in regional output in both, and cold weather forecasts in the …
Overview – We expect most commodity prices to struggle over the rest of this year as developed economies flirt with recession, the US dollar remains strong and investor risk appetite moderates. That said, we wouldn’t be surprised if the Brent oil price …
26th September 2023
Global steel production growth continues to struggle The slowdown in global steel production in August is consistent with our long-held view that slowing demand will weigh on production in the second half of this year. Weakening demand stems from slowing …
25th September 2023
Investment in the green transition is unlikely to rise quickly enough this decade to help achieve net zero by 2050. But a greater focus on areas including renewables and electric vehicles will still probably push up investment’s share of global GDP by …
Most commodity prices fell this week as the Federal Reserve left the door open to another interest rate hike before the end of the year , and indicated that rates will remain higher for longer. However, we are sticking with our view that US inflation will …
22nd September 2023
A healthier picture of aluminium supply An increase in year-on-year production growth, coupled with upward revisions to the back data, means that global aluminium supply is much stronger than previously thought. Production reached a record high in August …
20th September 2023
We expect that the global cotton market will be finely balanced in 2023/24 as demand picks up and supply falls across key producers. We forecast that the US cotton price will rise gradually from here, but will not revisit the highs of 2022. The cotton …
18th September 2023
Note: Join our online briefing on Tuesday, 19 th September about oil prices and the risks to the global inflation outlook. Register here . The mood was upbeat in commodity markets this week, with prices rising across all sectors. Oil stood out, with …
15th September 2023
Based on our view that US economic growth will prove resilient, despite the rise in interest rates, and that US inflation will ease, we expect the gold price to fall to $1,800 per ounce by year-end. Since rising to around $2,000 per ounce on safe-haven …
We think the recent rally in the iron ore price will soon go into reverse. Steel demand in China has surged in recent months, but we think that will prove temporary. China’s steelmakers should cut back on production once the boost to demand from a pick-up …
14th September 2023
Note: Join our online briefing on Tuesday, 19 th September about oil prices and the risks to the global inflation outlook. Register here . While we think Saudi Arabia and Russia’s supply cuts, which have sent oil prices surging in recent weeks, will be …
Prices will remain buffeted by weak global economic growth and a strong dollar, at a time of mounting supply risks and some policy stimulus in China. These conflicting pressures suggest that prices will be fairly rangebound in the coming months. In …
8th September 2023
It was a mixed week for commodity prices as they faced conflicting pressures in the form of the appreciation of the US dollar, mounting supply risks and signs of some resilience in China’s demand. Although the stronger dollar has probably acted as a lid …
China’s commodity import volumes rose strongly in August compared to July. Crude oil imports were probably supported by the ongoing recovery in the aviation sector, which we expect to continue in coming months. But greater enforcement of steel output …
7th September 2023
China’s announced support for the property sector and the extent of fiscal stimulus is modest, but it will help to support base metals demand in the coming months. Accordingly, we expect prices to tread water over the rest of 2023. Prices should rise in …
6th September 2023
Energy prices will remain historically high over the remainder of this year. OPEC+ output cuts, which have kept the oil market constrained, will continue until the end of the year, while demand in the US and China has held up. The natural gas market …
Most commodity prices rose this week (see Chart 1) after data showed that US labour market conditions are easing (see here and here ), lowering expectations for US interest rates and weakening the dollar. Chart 1: S&P GSCI Sub-Indices (2 nd Jan. 2023 = …
1st September 2023
While doom and gloom builds around China’s growth, PMIs for August provided some encouragement this week, even if they didn’t paint a picture of booming commodities demand. They suggest infrastructure spending has begun to support metals demand and that …
We think that the silver price will fall over the next few months. But as macroeconomic and financial factors switch from a drag to a boost to demand, and as photovoltaic demand gathers pace, the price should recover in 2024. While the silver price has …
31st August 2023
China’s energy demand has been a bright spot in the gloom of an ailing property sector and disappointing economic growth. We think China’s crude oil and natural gas demand will rise further next year, however, coal consumption should fall as hydropower …
30th August 2023
