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Commodity markets have been relatively quiet over the last few weeks , with many prices trading in a narrow range. There are a few exceptions, most notably the prices of natural gas and coal , which have soared on the back of surging power demand and …
10th September 2021
Although world trade volumes are likely to hold up for a while yet, a reversal of some of the shift in spending patterns caused by the pandemic is likely to weigh on commodity demand. This is another reason to expect most commodity prices to end the year …
8th September 2021
China’s imports of key commodities rose almost across the board in August, but we doubt that this is the start of a new upwards trend. Instead, with many of the factors that had boosted demand now fading, we expect China’s commodity imports to resume …
7th September 2021
Overview – After sharp falls in the middle of the month, most commodity prices ended August broadly flat. However, we doubt it will be long before the downward pressure on prices intensifies again. After all, economic growth in most major economies now …
3rd September 2021
There wasn’t a clear direction in commodity markets this week, with most prices driven by commodity-specific factors . Natural gas and coal prices continued to surge, while the prices of some industrial metals struggled on the back of weaker China PMI …
The China PMI data for August continue to suggest that commodity demand in the world’s largest consumer is coming off the boil. As a result, the wedge between industrial metals prices and the China activity data has continued to grow, which underpins our …
1st September 2021
There was a dramatic turnaround in the fortunes of commodities prices this week, with across-the-board gains as risk appetite picked up and the US dollar eased back . Fed Chair, Jerome Powell, was cautious about imminent Fed tapering at the Jackson Hole …
27th August 2021
We think that the adoption rate of renewable electricity will accelerate in the decades ahead, which should contribute to a near-continuous decline in demand for coal. Demand for natural gas should still eke out some growth over the next decade or so …
26th August 2021
Some of our forecasts for commodity prices this year have been blown off course by extreme weather events. As economists we cannot pretend to have insight into future weather patterns, but we can share some thoughts on what more frequent adverse weather …
23rd August 2021
Commodity prices mostly fell this week on the back of a stronger US dollar as well as mounting concerns over the demand outlook. China’s July activity and spending data, published on Monday, were weaker than consensus forecasts, and the ongoing spread of …
20th August 2021
The UN’s latest Intergovernmental Panel on Climate Change (IPCC) report warned that ever-increasing greenhouse gas emissions are a ‘code red for humanity’, which could give further momentum to the green energy transition . This transition primarily …
13th August 2021
The latest trade data out of China adds to the evidence that demand growth in the world’s key commodity consumer is slowing. This supports our view that the broad-based rally in commodity prices from their pandemic-induced lows has run its course, and …
9th August 2021
Concerns surrounding the spread of the Delta variant of COVID-19 were the main driver of prices this week, but the impact on prices was far from uniform. Not surprisingly, oil prices slumped as many countries in Asia, including China, tightened travel …
6th August 2021
A decision by the Biden administration to increase US biofuel mandates in 2021 and 2022 has the potential to be a gamechanger for corn demand. However, we think that this is unlikely, which is one reason why we think that corn prices will fall over the …
5th August 2021
China’s July survey data suggest that manufacturing and construction activity have continued to cool, which supports our view that a slowdown in China will weigh heavily on industrial metals prices . The Caixin and official manufacturing PMIs both …
2nd August 2021
The recent bounce in commodity prices continued this week, helped by the ongoing depreciation in the US dollar and a series of risks on the supply side which are rearing their head . Most notably, a spell of cold weather in Brazil has dampened the supply …
30th July 2021
Download the PDF for the Full Report Overview – We think that the widespread rallies in commodity prices from their pandemic-induced lows are now close to, or in some cases already past, their peak. Most notably, we anticipate that Q3 will be as good as …
29th July 2021
Oil prices have been on something of a round trip this week – falling at the start of the week as OPEC+ finally agreed to a new output agreement and the ongoing spread of the Delta variant fuelled concerns over the global economic outlook, and then …
23rd July 2021
The OPEC+ agreement, signed yesterday, should help to stabilise oil prices and we expect Brent crude to trade in a narrow band of between $70 and 75 per barrel over next six months. But we expect Brent to fall into the $60-70 range in 2022 as more global …
19th July 2021
Reports that the UAE and Saudi Arabia have reached a compromise deal over oil production quotas support our forecast that oil prices will end the year lower . Admittedly, the deal is yet to be agreed by OPEC+. But even if the group fails to reach a formal …
16th July 2021
China’s imports of most industrial commodities continued to fall in June. We expect import volumes of near all commodities, but especially the industrial metals, to ease further in the months ahead as economic growth slows and activity in industry and …
13th July 2021
The oil market will probably struggle to find direction in the coming weeks until there is some resolution to the impasse created by the failure to reach unanimous agreement at the last monthly OPEC+ meeting. There remains the very real risk of a …
9th July 2021
Overview – Oil prices were rising in June even before the July OPEC+ meeting ended in disarray, without agreement. Strong growth in demand as economies lift virus-related restrictions is expected to continue to support the prices of all energy commodities …
6th July 2021
The failure of OPEC+ to agree to new production quotas has created considerable uncertainty about the group’s oil production going forward. In this Update , we lay out three possible scenarios for OPEC+ output in the coming months and what they would mean …
We expect strong growth in oil demand this quarter as virus-related travel restrictions are lifted in most of the largest consuming countries . At the same time, supply will remain relatively constrained even if, as we think likely, OPEC+ is gradually …
2nd July 2021
China’s June survey data show softer growth in activity and supports our forecast that economic growth will slow from here, which will weigh on the prices of most commodities, especially the metals . The headline official and unofficial manufacturing PMIs …
1st July 2021
Most commodity prices recouped some of their post-FOMC losses this week. Investor concerns surrounding Fed tightening have seemingly eased, which weighed on the dollar. At the same time, news that a bipartisan agreement has been reached over a US …
25th June 2021
Although we remain optimistic about the near-term demand outlook, we think that the price of US lumber will fall further in the coming months as domestic supply continues to revive . The price of US lumber (CME random lengths) briefly rose to a record …
23rd June 2021
Commodity prices fell sharply this week following a more hawkish than expected Fed meeting and a disappointing batch of activity data out of China . Both developments are in line with our forecast of higher real yields and a stronger dollar in the US, as …
18th June 2021
The prices of most industrial commodities held up fairly well this week . However, the slowdown in broad credit growth and the fall in volume terms of China’s imports of industrial commodities in May suggests that commodity demand there is coming off the …
11th June 2021
Even after accounting for a fall in Brazilian production and a rise in global demand, we still expect the size of the global sugar market surplus to increase in 2021/22, which will weigh on prices . The price of raw cane sugar (sugar #11) has surged to …
8th June 2021
China’s imports of industrial commodities, particularly iron ore and unwrought copper, eased back in May. We expect import volumes of both these commodities to fall further in the coming months as policy support continues to be gradually withdrawn . …
7th June 2021
In what proved to be one of the shortest OPEC+ meetings ever, the group agreed this week to stick to its previously planned increase in output in July . Oil prices rose sharply on the back of the announcement, with Brent now trading above $70 per barrel. …
4th June 2021
Overview – Prices generally rose in May, bolstered by signs of recovery in the global economy – led by the US – and stronger commodities demand. While prices could make further gains in the near term, we expect the prices of most commodities to be in …
2nd June 2021
The key takeaways from China’s May survey data are that while demand remains robust, supply shortages are leading to inventory drawdowns and price inflation. The data are broadly positive for commodity demand, but we think the withdrawal of fiscal …
1st June 2021
OPEC+ is set to meet next Tuesday, when we expect the group to agree to continue with its incremental increases in production through to July . We think it unlikely that the group will address the thornier issue of the ongoing rise in Iran’s production …
28th May 2021
We think that the prices of wheat, corn and soybeans will decline over the next six months owing to a rebound in global supply and slower demand growth in China . The prices of wheat, corn and soybeans all soared to multi-year highs earlier this year …
27th May 2021
In the short-run, China has no choice but to grit its teeth and keep buying Australian iron ore, even as bilateral ties continue to fray . But this dependence will diminish over time thanks to increased supply from other sources, greater use of recycled …
26th May 2021
The prices of most commodities dropped back again this week as global equity markets struggled to make ground and virus cases in parts of Asia continued to rise. Meanwhile, reports emerged that good progress had been made in negotiating a new nuclear deal …
21st May 2021
The recent depreciation in the US dollar has helped to boost commodity prices. But while we expect a stronger dollar to weigh on most commodity prices later this year, we think that oil prices will still rise . The majority of commodity benchmarks are …
20th May 2021
Biden’s infrastructure package is ambitious, but we doubt it will pass in its current form If it did pass, the impact on energy markets could be large But we doubt it would be too significant for industrial metals markets In this Commodities Watch , we …
14th May 2021
Aside from coal and natural gas, the prices of most commodities fell this week in tandem with the declines in global equity markets . Investors are concerned about rising inflation, particularly in the US, and have seemingly reduced their exposure to …
There are three overarching themes present in the agriculture document associated with China’s 14th Five-Year Plan – improving food security, continuing with the modernisation of the rural economy and higher environmental standards . In this Update we …
13th May 2021
Commodity prices pushed higher yet again this week . Most notably, the seemingly unassailable climb in industrial metals prices saw the price of copper push above $10,000 per tonne for the first time since 2011. However, it is still difficult to square …
7th May 2021
China’s commodity imports fell back in April compared with a month earlier. This chimes with our view that imports of industrial commodities into China will come off the boil as economic growth there slows. In turn, this should be a factor dragging the …
It was another good week for commodity prices, with the exception of precious metals . Somewhat better-than-expected Q1 GDP and survey data, particularly in the euro-zone, was one factor fuelling expectations of stronger demand. The pick-up in vaccination …
30th April 2021
While commodities and US equities often move in the same direction, this is not always the case. We expect poor returns from commodities over the next few years, but reasonable returns from US equities. The correlation between the annual returns from the …
29th April 2021
Download the PDF for the full report. Overview – Following a spectacular rebound from pandemic-induced lows, we continue to expect that most commodity prices will be falling again by end-2021. Although growth in demand should be strong as the global …
27th April 2021
Most commodity prices increased this week, with the prices of agricultural commodities rising particularly strongly . The prices of corn, soybeans and wheat surged, reaching new multi-year highs on the back of adverse weather in the US and Brazil. In …
23rd April 2021
Even though we expect lumber demand to hold up well for some time, we still think that a rebound in supply will lead to a sharp fall in the price of US lumber over the next eighteen months . The price of US lumber (CME random lengths) has skyrocketed from …
20th April 2021