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The latest twist in the Russia-Ukraine crisis is likely to keep commodity prices elevated over the coming weeks and months. And if the situation spirals into a more serious and wide-ranging conflict between Russia and the West, commodity prices could rise …
24th February 2022
The recent agreement between the US and Japan will allow the majority of Japan’s steel exports to enter the US without levies. We expect this increased supply will combine with slower growth in demand to lead to further falls in US steel prices through …
15th February 2022
China’s refined metals output mostly rose in 2021, despite power rationing in Q4. We expect output growth to continue in 2022, which is a factor underpinning our view that metals prices will fall . Aluminium output in China grew by over 4% in 2021, as new …
9th February 2022
While high power prices and low stocks will support prices in the near term, we think that prices will pull back in the second half of 2022 as Chinese economic activity slows further and supply improves . With the exception of iron ore, the prices of most …
13th January 2022
Exchange stocks of base metals have fallen this year, as supply was interrupted by power rationing in China as well as the ongoing effects of COVID-19. However, now that power restrictions have been lifted, and with Chinese construction activity …
21st December 2021
We doubt that the recent jump in China’s iron ore imports is indicative of increasing demand. In fact, we expect demand for iron ore in China to cool as construction activity continues to slow and the clampdown on excess steel production continues, both …
9th December 2021
The sharp rise in China’s commodity imports last month could be taken as a sign that underlying demand growth is undergoing a renewed acceleration. But given that this is just one month’s data, and that other indicators point to a further softening in …
7th December 2021
Cobalt prices have soared in 2021 to almost double the 2020 average price of $31,726 per tonne. We expect the growth in EV production and issues around supply to continue to push prices higher in 2022 . The cash price of LME cobalt raced to over $62,850 …
2nd December 2021
We were already downbeat on the outlook for most commodity prices in 2022, not least because we thought that prices had lost touch with demand fundamentals. The risk of Omicron-related effects on demand just adds weight to our view . The prices of most …
29th November 2021
Copper prices have soared since mid-2020 as demand raced ahead of supply. However, a strong supply response is now underway which, in tandem with cooling copper demand, will weigh on prices into 2022. The cash price of LME copper surged close to $11,300 …
15th November 2021
The recent highs in the zinc price have been driven by fears around supply as sky-rocketing energy prices have undermined smelter profitability. We expect power prices to remain high in the coming months which should constrain zinc supply and boost …
26th October 2021
The well-documented shortages of semiconductors have slammed the brakes on global vehicle production. As a result, the near-term prospects for platinum group metals (PGMs) demand in autocatalysts have been dented. It is only once a meaningful recovery in …
25th October 2021
Power rationing in China has raised concerns about metal supply. But perhaps less obvious is that power rationing will also negatively affect demand if manufacturing activity is curtailed. On balance, we think that the supply impact will dominate and …
19th October 2021
We think that weaker physical demand, higher real US Treasury yields and a stronger dollar will mean that the recent poor performance of the silver price is set to continue over the next couple of years . After a brief spell of volatility in the price of …
7th October 2021
China’s manufacturing PMIs for September diverged, but both still point to subdued commodities demand. What’s more, the surveys were conducted before power shortages started to constrain activity. Weaker industrial activity should put downward pressure on …
30th September 2021
We believe that current high nickel prices will prove short lived, and expect weaker economic growth in China and the tapering of US monetary policy support to depress demand for nickel and pull down its price by the end of the year . The price of LME …
28th September 2021
Although a messy collapse of Evergrande is a downside risk to our near-term price forecasts, it adds weight to our view that China’s construction sector is in structural decline. In turn, this underpins our view that industrial metals prices will be on …
23rd September 2021
After climbing to multi-year highs in May , the zinc price has stayed strong, with much less volatility than its counterparts. However, we feel weaker economic growth in China and US tapering of monetary policy will work in tandem with the ongoing …
6th September 2021
Aluminium prices have recently been boosted by a series of supply outages in China. But unlike Chinese steel production, where declines have been driven largely by government policy which looks here to stay, we suspect that the falls in aluminium output …
1st September 2021
The government in China has stepped up measures to tackle pollution and excess capacity in the domestic steel sector over the past few months. This adds weight to our view that steel production, and consequently the price of iron ore, will fall back over …
19th August 2021
China’s latest activity data are further evidence of a slowdown in its economy. This aligns with our view that industrial metals demand will soften in the year ahead, putting downward pressure on prices . China’s July industrial data were generally much …
18th 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
After reaching an all-time high in May, the price of copper has since come off the boil. And we think it will fall further over the next eighteen months or so, as a combination of weaker economic growth in China and a greater availability of both ore and …
16th July 2021
The breakdown of China’s trade data for May shows that the recovery in imports of scrap and tin ore has hit a few stumbling blocks. Were these issues to persist, they could help to put a floor under prices even if, as we expect, the decline in demand for …
1st 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 …
After rallying from April onwards, the price of gold has dropped back in recent weeks. We expect the price of gold to fall further over the next couple of years as long-dated US real yields climb . The price of gold rallied from $1,700 to $1,900 per ounce …
30th June 2021
Exchange stocks of base metals have risen this year, which usually suggests that markets are well supplied. But much of the recent build in stocks has been opportunistic and driven by financial considerations rather than a surplus in the market. …
29th June 2021
Lead demand should bounce back this year, despite the shortage of semiconductor chips which is currently curtailing global vehicle production. However, we think a simultaneous recovery in lead supply (particularly secondary supply) will keep the market in …
18th 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
Limited domestic supply, expensive imports and strong growth in demand have fuelled the rally in US steel prices. But with supply set to improve, at a time of softer growth in demand, prices should fall . Steel prices have soared globally since their …
26th 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 …
While China’s announcement that it will crack down on speculation and market irregularities has taken some of the froth out of the iron ore market in recent weeks, we think the price of iron ore will ultimately be driven even lower by less favourable …
The recent disruption to global auto production stemming from ongoing semiconductor microchip shortages poses a downside risk to our price forecasts for platinum and palladium. In this Update , we map out the potential impact on demand for the metals from …
21st May 2021
Recent data have highlighted the strength of the rebound in physical demand for gold, especially in India and China. But we don’t think this poses much of a risk to our forecast for the gold price to fall this year . According to the World Gold Council’s …
30th April 2021
The latest China trade data show that ore imports are rebounding, though scrap imports remain subdued. Meanwhile, imports of refined copper have seen a renewed surge. Nevertheless, we continue to expect China’s imports of ore and scrap to rise while …
15th 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 …
1st April 2021
The recent drop in the price of gold below $1,700/oz. has illustrated its greater sensitivity to US long- than short-dated real yields. Although the price has nudged back up above this level at the time of writing, we expect it to fall back to an even …
31st March 2021
News on a potential breakthrough in the supply of nickel matte from Tsingshan has dampened nickel prices. Rather than a step-change in nickel market supply, we reckon that this development will simply act as a structural drag on the nickel price . After …
17th March 2021
While we are revising down our forecast, we don’t expect the price of gold to fall that much further this year. In our view, the recent decline in investment demand is unlikely to continue for long. What’s more, we think the ongoing recovery in physical …
10th March 2021
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 …
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
Our in-house demand proxies offer further evidence that industrial metals prices are running ahead of the underlying fundamentals. This helps to explain the sharp drop in industrial metals prices since the end of February and supports our view that they …
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 …
1st March 2021
Global aluminium production rose in January. And with LME and ShFE prices near multi-year highs, we expect further gains in production this year, which will ultimately weigh on prices . According to the International Aluminium Institute (IAI), global …
23rd February 2021
With the first batch of Chinese trade data for 2021 not due for another few weeks, this Update outlines the key developments to look out for. Overall, we expect imports of refined metal to fall back while ore and scrap imports rise, all of which supports …
17th February 2021
Supply disruptions and strong electronics demand have lifted the tin price from its virus-induced lows. But we anticipate that a switch in consumer spending away from goods towards services once lockdowns are relaxed, will act as a drag on the price of …
12th February 2021
Despite our relatively conservative forecast of supply growth, we still think that the price of iron ore will fall sharply this year owing to slower growth in China’s demand . The price of iron ore had a superb 2020, rising from around $80 per tonne to …
10th February 2021
Many media reports have linked silver’s recent price volatility to last week’s targeted buying of a handful of small US equities by retail investors. But we reckon that it marks just another bout of silver’s well-known price volatility . The price of …
4th February 2021
Despite a surge in gold prices last year, physical demand for gold fell precipitously. But we think that a brighter economic outlook will boost consumer demand this year and help to prop up the gold price . Total demand for gold fell in 2020, largely due …
2nd February 2021
Despite the new South African coronavirus variant, it appears that PGM production in the country will hold up well, for now, since the virus-containment measures are not as severe . The recent surge in new daily virus cases, in part caused by the latest, …
14th January 2021
