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Most commodity prices rose this week following a batch of positive economic data releases . Oil prices were up particularly strongly on the back of a larger-than-expected weekly decline in US crude stocks and an upward revision to the International Energy …
16th April 2021
The ongoing revival in global demand growth together with constrained global supply means that the price of corn is likely to hold onto most of its recent gains for some time. That said, we think that the corn price will fall in 2022 as demand growth in …
15th April 2021
China’s imports of key industrial commodities point to ongoing strength in domestic demand. But the bigger picture is that import volumes remain well below last year’s peaks, and we expect growth in China’s commodity demand to slow further this year as …
13th April 2021
It was a relatively quiet week in commodities markets, with weakness in the US dollar giving agricultural commodities, in particular, a bit of a lift. We think markets could struggle to find a clear direction in the coming weeks given the mixed messages …
9th April 2021
Overview – A rise in new coronavirus infections in many parts of the world, including Europe and India, weighed on investor sentiment in commodity markets in March. However, all the signs point to a rapid recovery in US activity and, as vaccines are …
7th April 2021
The decision earlier today by OPEC+ to ease its oil production cuts from May means that production from the group will be slightly higher than we had previously anticipated in Q2 . However, the rise in OPEC+ production will only be gradual, and with the …
1st April 2021
Despite some conflicting messages from the official and unofficial PMI data out of China, both surveys continue to point to lower industrial metals prices. A pick-up in manufacturing activity and exports elsewhere in Asia should ensure that prices hold up …
Commodities markets were something of a mixed bag this week . The grounding of a container ship in the Suez Canal helped to prop up the prices of some commodities despite growing worries over the potential hit to demand in Europe from the slow vaccine …
26th March 2021
Commodities markets experienced a bit of a reality check this week, with prices falling despite little material change in the underlying demand and supply fundamentals . In the same way that optimism about demand pushed up oil prices in recent months, …
19th March 2021
History shows that supercycles are usually demand-driven, and that the performance of individual commodity prices has varied hugely both within and between past supercycles. In addition, supercycles can temporarily give way to shorter-run boom/bust …
17th March 2021
Agricultural prices are currently trading near multi-year highs, but we doubt that a supercycle is underway or will occur anytime soon. Instead, we think that agricultural prices will fall over both the short and longer term as demand growth wanes and …
16th March 2021
Despite big moves in bond and equity markets, commodity markets were fairly subdued this week . Nevertheless, we expect oil prices to break higher again before long, and our new forecasts show them peaking in Q3 (compared to Q4 previously) . Meanwhile, we …
12th March 2021
The deeper-than-expected production cuts by most OPEC+ member states and a revival in global demand means that the oil market is now likely to be in a bigger deficit than we had previously envisaged for much of this year. We now expect the price of Brent …
Industrial metals prices have soared recently to multi-year highs. But we think the rally is unsustainable. In fact, it cements our view that slowing growth in China will drag prices lower by end-2021 . After rebounding from their virus-induced lows early …
10th March 2021
China’s trade data for January-February show a clear deceleration in the growth of commodity imports. We expect this trend to persist over the course of this year as policy support is gradually withdrawn . China’s export growth surged to a 26-year high of …
8th March 2021
It was a relatively two-sided affair in commodities markets this week. On the one hand, oil prices rose on the back of greater-than-expected output restraint announced by OPEC+. And on the other hand, a partial unwinding of investor optimism weighed on …
5th March 2021
Slower demand growth and an abundance of supply will limit gains in oil prices over the long term, which we think will ultimately prevent oil from featuring in the next commodity supercycle . As we recently outlined in a Commodities Watch , commodity …
4th March 2021
President Biden’s ‘American Rescue Plan’ has been cited as one the key factors in the recent run-up in commodity prices. But even if it is passed in full, we think it will do little to boost commodity demand . The proposed $1.9trn fiscal stimulus in the …
2nd March 2021
Overview – Most commodity prices rose in February encouraged by falling COVID-19 infections and the vaccine rollout, which point to a recovery in economic activity and higher commodities demand later in the year. That said, we expect oil to be the main …
1st March 2021
China’s February PMI data were more subdued but still suggest that economic activity remains elevated, and the data elsewhere in Asia point to persistent strength in commodities demand in the coming months . The official manufacturing PMI (released …
A spike in government bond yields and subsequent sell-off in equity markets caused the broad-based rally in commodity prices to go into reverse late in the week . That said, most industrial commodity prices still managed to end the week higher. …
26th February 2021
China has ramped up its imports of agricultural commodities since mid-2020 Alongside investor speculation, this has helped push prices to multi-year highs But we expect Chinese imports to taper off this year, which will weigh on prices In this Commodities …
Abnormally cold temperatures in the US, particularly Texas, have forced a significant share of US oil wells and refineries offline this week. Oil prices initially surged on the back of this disruption, but they have since retraced most of their gains. In …
19th February 2021
Although we expect oil prices to rise a bit further this year, we doubt that we are in the early phase of a new “super cycle” in commodities. In fact, we project that the returns from commodities will lag those from US equities considerably over the next …
We think that slower growth in US housing starts and increased supply will weigh on the price of US lumber over the coming quarters . That said, prices are likely to remain elevated relative to past standards . The price of US lumber soared to …
12th February 2021
The price of Brent crude oil breached the $60 per barrel mark this week for the first time in over a year, in a continuation of its strong performance since COVID-19 vaccines were announced in November. Given our upbeat oil demand outlook for H2 2021, we …
Strong Chinese demand has fuelled a rally in commodity prices But history suggests that prices will fall back as stimulus is withdrawn That said, the “greening” of the global economy is a medium-term positive for metals The latest rally in many commodity …
8th February 2021
In an otherwise fairly quiet week, some wild gyrations in the silver market were the focus of investor attention . Starting late last week, the price of silver surged by 20% to reach a multi-year high on Monday. Reportedly, the retail investors that had …
5th February 2021
The latest fall in China’s manufacturing PMI readings is a further sign that its economy is slowing. Nevertheless, activity there, and elsewhere in Asia, remains strong and we think that it will hold up well in the near term, which should support …
1st February 2021
It was another largely uneventful week in commodity markets . For all the talk of an impending ‘super cycle’, the prices of most commodities have generally continued to struggle to extend the large gains made towards the end of last year. In fact, as we …
29th January 2021
Despite the ongoing economic uncertainty, we expect that global demand for meat and animal feeds, such as corn and soybeans, will rise over the next few years . During the last global recession, consumers in the advanced world switched away from expensive …
We think that coffee prices will be among the few agricultural commodity prices to rise in 2021, not least because a relaxation of COVID-19 restrictions should boost out-of-home consumption . After falling in the first half of 2020, the prices of almost …
28th January 2021
Despite some parts of China re-introducing lockdown measures and reported virus cases around the world continuing to spiral upwards, the prices of most commodities held up well this week as investor enthusiasm for risky assets remains high. We suspect …
22nd January 2021
Overview – In a reversal of the trend in 2020, we expect oil prices to rise this year and the prices of industrial metals and agriculturals to fall. We suspect that oil demand, particularly in developed economies, could surge in the second half of the …
After the broad-based rally of the last few weeks, the prices of many industrial commodities dipped a little this week, reflecting concerns about rising new virus cases and the widespread tightening of virus containment measures . The rally may well …
15th January 2021
We think that the surge in many agricultural commodity prices is somewhat overdone. Although ending stocks for the major grains and soybeans will be lower in the year ahead, they will still be relatively high by historical standards, which is why we …
The latest China trade data showed that commodity import volume growth eased back a little in December. But tailwinds from 2020’s stimulus should keep import volumes strong for a while yet . China’s exports climbed by 18.1% y/y in US dollar terms, …
14th January 2021
With the notable exception of oil, we are generally negative on the outlook for commodity prices this year. While oil should benefit from a vaccine-related revival in global transport activity, we expect that the prices of industrial metals and …
12th January 2021
After a strong finish to 2020, most commodity prices built on their gains in the first week of January , as investor sentiment continued to prove supportive and Saudi Arabia announced that it would unilaterally cut oil production in February and March. In …
8th January 2021
Overview – Commodity prices rose in December in spite of a tightening of COVID-19 restrictions in a number of developed economies, which will weigh on commodities demand at the start of this year. Markets seem to be focusing on a brightening demand …
5th January 2021
China’s December PMI readings suggest that the pace of economic expansion has started to ease, which chimes with our view that the demand for and, prices of, most metals will fall this year . The official manufacturing PMI fell to 51.9 in December, down …
4th January 2021
The price of palm oil has climbed resolutely since May, trading currently at a nine-year high of around MYR 3,800 per tonne. Nonetheless, we think that the price will fall in 2021, as supply constraints ease . The recent rally in the price of palm oil has …
23rd December 2020
We estimate that the exports of goods and services that are already facing restrictions by China contribute around 1.8% to Australia’s GDP. While we still expect iron ore and liquefied natural gas exports to remain spared, that figure could rise to around …
One of the latest casualties of heightened China-Australia geopolitical tensions is Australian coal exports. But we think that this will have limited implications for demand and prices as, for the most part, coal should be re-directed to other countries . …
22nd December 2020
We think that the price of oil will outperform most other commodity prices next year . A lifting of virus restrictions, as vaccines are rolled out, should allow for a strong bounce-back in oil demand and prices in the second half of next year, whereas we …
18th December 2020
Despite the re-introduction of lockdown measures in some US states, industrial commodities prices continued to rise this week on the back of ongoing hopes of a vaccine-induced economic boom next year . Nevertheless, we think that the risks to most of our …
11th December 2020
We have now factored the rollout of an effective COVID-19 vaccine into our forecasts and, as a result, we are slightly more positive on the demand outlook for some agricultural commodities. That said, we still expect most agricultural prices to fall over …
8th December 2020
China’s commodity import volumes should hold up well in the coming months in part because ongoing fiscal support should continue to boost domestic demand . China’s exports surged by 21.1% y/y in US dollar terms to a record high last month, but imports …
7th December 2020
After much wrangling, this week OPEC+ agreed to a partial roll over of its current collective output cut into next year. But the obvious divisions between members of the group mean the question marks over the future direction of oil supply are as large as …
4th December 2020
Industrial metals prices have surged in recent weeks owing in large part to strong economic activity in China. And while prices should hold up during the first quarter next year, we think that they will ease back by end-2021 as demand growth in China …