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The strength of the latest China survey data may signal that growth there has passed its low-point. But we think there are still reasons to be cautious, with negative implications for most commodity prices. … Still grounds for caution, despite stronger …
1st April 2019
After a strong first quarter, we expect the prices of most commodities to ease back over the course of 2019 on the back of subdued growth in demand. There are now broad-based signs of slower growth in most major economies, including the US, the euro-zone, …
29th March 2019
In a week when fears about global economic growth were stoked by a dovish Fed and weak euro-zone flash PMI readings for March, commodity prices actually performed rather well. However, we think that energy and industrial commodities will struggle to hold …
22nd March 2019
China’s economic rise over the past 30 years involved massive increases in commodity consumption and the country now plays a significant role in determining prices. However, the impact on global agricultural markets has been more nuanced, not least …
21st March 2019
The recent upturn in most commodity prices appears at odds with the negative trend in global manufacturing. Of course, supply factors could explain the divergence, and probably do in the case of oil. However, we think supply fears could prove unfounded if …
19th March 2019
The prices of many commodities rose this week, despite soft economic data, in part owing to confirmation of Chinese policy stimulus at the National People’s Congress. As it happens, we think the scale of Chinese policy easing will only be sufficient to …
15th March 2019
Elevated levels of global end-stocks have prompted us to review our price forecasts. We have downgraded our end-2019 corn price forecast but left the price outlook for wheat and soybean unchanged for now. … High global stocks to weigh on wheat and corn …
12th March 2019
After a relatively quiet week, the prices of most commodities took a tumble on Friday afternoon following the release of weak US February employment data. A rise of just 20,000 in non-farm payrolls, combined with poor Chinese February trade data and a …
8th March 2019
China’s imports and exports dropped sharply in February. Admittedly, some of the plunge can be explained by the shift in timing of the Lunar New Year holiday, but we expect trade to remain weak in the coming months as global demand cools and domestic …
There has been a surprisingly muted reaction in commodity markets to the latest reports that China and the US are close to a trade deal. We think this reflects a combination of the fact that much of the good news has already been priced in, as well as …
5th March 2019
Next week, commodity markets will be closely watching the annual meeting of China’s parliament, the National People’s Congress, hoping for additional fiscal stimulus. The government’s Work Report and Budget will be presented on the first day. Meanwhile, …
1st March 2019
The latest pick-up in the unofficial PMI data does not change our expectation of a slowdown in China’s economy, which underpins our forecast of mostly weaker commodity prices, especially industrial metals. … Improvement in China’s PMI unlikely to …
Oil and industrial commodity prices rose in February on hopes of a US-China trade deal. However, even if there is a deal, we forecast that prices will fall back owing to lower demand as global economic growth slows. … Boost from trade talks to prove …
28th February 2019
Since the start of 2019, commodity indices have increased at the same time as a host of asset classes, including US and emerging market equities. This Commodities Watch will explore whether this rising tide is set to continue or whether it hits the rocks. …
27th February 2019
The prices of many major commodities, including oil, gold and copper, hit multi-month highs this week, but we think that almost all will fall sooner rather than later. The rally this week was fuelled by signs that the US and China are inching towards a …
22nd February 2019
There has been much commentary in recent months on the balance of power in relations between the US and Saudi Arabia. Many of the areas of mutual interest are geopolitical in nature and we are not political analysts. But we think that we can make several …
21st February 2019
We have revised up our iron ore price forecast following the disaster at the Córrego do Feijão iron ore mine and its aftermath, given the negative implications for supply. However, with demand set to be lacklustre, we still think that iron ore prices will …
20th February 2019
After rising strongly this week, the price of oil is likely to remain supported in the short term by clear signs of lower supply from OPEC (mainly Saudi Arabia) and the loss of Iranian and Venezuelan barrels. However, we think that slower growth in demand …
15th February 2019
China’s major commodity exports rose in January, probably due to a combination of an earlier Chinese New Year holiday and sluggish domestic demand. Imports also painted a surprisingly resilient picture, but we don’t think that this will persist as the …
14th February 2019
Oversupply has been a major headwind for many agricultural commodity prices in recent years. But we think that, in many cases, stocks will start to be drawn down in 2019, which should give a lift to prices. Admittedly, our forecast of slower global …
11th February 2019
The return of Chinese investors could lead to a sharp rise in the price of iron ore next week, given the likelihood of significantly lower Brazilian supply. However, the prices of other industrial metals may fall on Thursday if, as we expect, China’s …
8th February 2019
Commodity prices have generally had a positive week, boosted by the US-China trade talks and the dovish tone adopted by the Fed at its FOMC meeting. However, the strong US employment report on Friday has tempered hopes that the Fed has finished its …
1st February 2019
Signs that the Fed was adopting a more dovish tone weighed on the US dollar in January, but boosted the prices of riskier assets, including commodities. However, we expect signs of slower global growth to dampen market optimism and lead to renewed price …
The latest weak PMI data underpin our forecast that China’s economy will continue to slow in the coming months, which we think will weigh on the prices of most commodities, but especially the industrial metals. … China slowdown is a headwind for …
Commodity prices largely shrugged off comments this week by the US Commerce Secretary that the US and China were “miles and miles” away from a trade deal. But the outlook for trade talks may take centre-stage next week as the Chinese Vice-Premier Liu He …
25th January 2019
Our forecast of slower global economic growth in 2019 poses a major headwind for commodity prices this year. What’s more, we are expecting further falls in global equity prices, which suggests that investor sentiment towards riskier assets more generally, …
24th January 2019
Commodity prices have generally risen this week, in large part due to optimism about further economic stimulus in China. We are more cautious as we expect the expansionary impact of stimulus to only feed through into the real economy in the second half of …
18th January 2019
The trade talks between the US and China last week ended on a positive note, but the lack of any details dashed hopes of imminent relief for the ailing US soybean sector. Indeed, even if a deal is reached, we think that ample supply and lower Chinese …
14th January 2019
China’s commodity import volumes were generally weak in December. Admittedly, oil imports rose strongly but this was probably opportunistic buying on the back of the slump in price rather than a sign of strong domestic demand. Indeed, given the slowdown …
The prices of most commodities rose this week, buoyed by a surge in the oil price, firmer equity prices and optimism about progress in the US-China trade talks. We think that some sort of face-saving deal will be agreed, not least because President Trump …
11th January 2019
Commodity prices have been volatile this week, driven more by macroeconomic and financial market developments than by commodity-specific fundamentals. Mounting concerns about the outlook for global growth, the recent slide in equity prices and falling US …
4th January 2019
Clear signs of a slowdown in China’s economy, coupled with falls in global equity markets, weighed on the prices of most energy and industrial commodity prices in December. In contrast, the prices of precious metals rose, boosted by safe-haven demand. We …
2nd January 2019
Commodity prices are mostly falling on the first day of trading in 2019 as China’s December PMIs showed that the economy finished 2018 on a weak note. While the authorities are loosening policy, we only expect the economy to stabilise by mid-year, which …
The price of oil plunged again this week but, while we are negative on the outlook for 2019, we think that the latest falls are being driven more by bearish investor sentiment than fundamentals. After all, OPEC+ appears to be serious about its output …
21st December 2018
Slower global economic growth will prove too much of a headwind for most commodity prices in 2019. What’s more, investor sentiment towards risky assets more generally is likely to deteriorate. These negative developments will more than offset any positive …
18th December 2018
The prices of most commodities, including oil, traded in a narrow range this week, at least until Friday when weak economic data out of China prompted a synchronised fall in prices. We suspect that the lagged impact of slowing credit growth in China will …
14th December 2018
We expect a combination of slower global GDP growth and persistent rises in US shale output to lead to lower oil prices in 2019. Our end-2019 forecast for Brent is now $55 per barrel ($60 previously). … Slower growth in demand to weigh on oil …
11th December 2018
China’s commodity import volumes softened last month, underpinning our view that slower growth in the broader economy will take its toll on China’s commodity demand and prices. The only exception was oil imports, which hit a record high. … Domestic …
10th December 2018
The 1.2m bpd output cut announced by OPEC and its allies today should absorb much of the oil market surplus in the short term. As such, it has sparked a rally in oil prices and in commodities more generally. However, we still expect burgeoning supply from …
7th December 2018
We continue to expect that slower economic growth in two of the largest consuming economies – the US and China – will weigh on commodity prices in 2019, even if China and the US manage to reach an agreement on trade. … Demand concerns to the …
3rd December 2018
China’s November survey data point to persistent weakness in economic activity, which will continue to be a factor weighing on the prices of commodities, particularly industrial metals. … Little to cheer in China’s …
Mounting US protectionism, particularly towards China, has been a key factor weighing on commodity prices for much of this year. As such, news that China and the US are to resume talks provides some reprieve. Of course, the ceasefire is only temporary and …
For the most part, commodity prices moved in a narrow range this week, but this relative stability may come to an abrupt end soon. Presidents Trump and Xi are set to dine together on Saturday at the G20 and trade will be high on the agenda. While a deal …
30th November 2018
The recent oil price crash has led some to ask if contagion might spread across commodities. However, the decline largely represented a catch-up with base metals and we think the latest drops may prove premature. That said, we expect oil and industrial …
27th November 2018
Oil prices fell by 7-8% last Friday on market fears of oversupply, but we suspect that producers will start to withhold exports in the coming months, putting a floor under prices. … Oil price falls too far, too …
26th November 2018
After a week when the prices of Brent and WTI fell by around 10%, there could be further big moves in commodity prices next week depending on the outcome of the meeting between Presidents Trump and Xi at the G20 summit on Friday. Industrial metals prices, …
23rd November 2018
The Baltic Dry Index (BDI, a measure of shipping costs for the world’s dry bulk commodities) is often cited as a bellwether of economic growth. As such, the recent slump should be cause for concern. However, in this Commodities Watch , we show how its …
22nd November 2018
The recent divergence between oil and natural gas prices gathered momentum this week and although we think prices overshot, we remain of the view that the outlook for natural gas prices in 2019 is positive, while we see little upside for oil. The oil …
16th November 2018
Following the recent 20% slump, the price of oil is now close to our end-year forecast and we expect prices to fall further in 2019 as growth in demand slows and supply remains ample. … Taking stock of our oil price …
13th November 2018
The price of oil (Brent) has dropped by around a fifth from its October peak and we expect it to continue to fall to $60 per barrel by end-2019. Supporting this view is our forecast that the oil market will be in a small surplus next year, an assessment …
9th November 2018