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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
Overview – Industrial metals prices have risen recently on the back of supply concerns related to higher energy costs and power rationing in China. Both factors will continue to support prices in the near term. However, we expect these supply issues to be …
3rd 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
Slump in output points to high prices for longer Global steel output plunged in September primarily owing to a dramatic decline in China’s production. We suspect that China’s output will remain low for some months yet, which will act as a floor under …
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
High power costs likely to deter production Slower growth in aluminium output in September was probably linked to surging power prices. The combination of constrained output and soaring production costs will support aluminium prices in the near term and …
20th 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
Overview – Natural gas and coal prices soared in September. In turn, this has raised the output costs of industrial metals, most notably those which are especially energy intensive such as aluminium and steel. At the same time, reports suggest that some …
5th 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
High prices failing to boost steel supply, at least so far Despite high prices, global steel output contracted in August. And given that the authorities in China are proactively encouraging lower output there, further falls in the coming months appear …
Aluminium output still growing despite China fears August’s IAI data suggest that fears that power rationing in Chinese smelting hubs would negatively impact supply, which have boosted aluminium prices to decade highs, are overdone. Instead, we think that …
20th 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
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
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
Global steel output to be weaker in the second half of 2021 A slump in China’s steel production in July led to a dramatic slowdown in growth in global steel output. While China’s production may stabilise or rebound a little in the coming months, it …
24th August 2021
Concerns over aluminium supply look misplaced Aluminium prices have recently been supported by reports that government-imposed power rationing has weighed on production in China, but there is little evidence of this in the latest data for July. This …
20th August 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
Overview – Although the prices of industrial metals have picked up again recently, we still expect them to be falling over the next year or so. Underpinning this view are our forecasts for economic growth to slow in China, a continued rebound in supply …
4th 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
Further evidence of a slowdown in China’s steel production Growth in global steel production remained in double digits in June, but this largely reflects the low base for comparison from last year. Meanwhile, government-imposed environmental controls in …
23rd July 2021
Production growth to accelerate as curbs on power in China are eased Global aluminium output growth softened in June, largely due to power cuts in China’s key aluminium-producing province of Yunnan. But these curbs have started to be relaxed in recent …
20th July 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
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 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
Growth in China’s steel output is slowing Growth in global steel production is still running high in year-on-year terms owing to the low base a year earlier. However, daily production in May was somewhat lower than April, as output in China dipped. We …
22nd June 2021
Global production to edge higher in the coming months Average daily global aluminium production edged up in May as smelters continued to take advantage of high prevailing prices. We think that production will rise further in the near future . According to …
21st 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
Overview – May was a strong month for the prices of most metals, but we suspect that this may be as good as it gets. After all, if we’re right in expecting economic growth in China to slow in the second half of this year, the prices of most industrial …
3rd 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
Global production rising, despite lockdowns Global steel production rose again in April as lower output in India, in particular, was offset by sizeable jumps in production in China, Russia and Brazil. For now, virus-containment measures remain a key …
High prices to incentivise production growth Average daily global aluminium production was unchanged in April, but we continue to expect that output will increase this year given current high prices and premiums . According to the International Aluminium …
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
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
Overview – Although we anticipate a strong global economic recovery in 2021, our forecast of a slowdown in China’s economy means that we still expect industrial metals prices to end the year lower. At the same time, a stronger US dollar and rising US …
28th April 2021
Nearing the peak in China’s production Global steel production continued to rise in March, no doubt incentivised by high prices. Growth in demand in some key markets, such as the US and China, has been strong, but we suspect that production in China will …
22nd April 2021
Global aluminium production likely to push higher before long Daily aluminium production dropped back a bit in March. But with prices currently at multi-year highs, and only very piecemeal restrictions on output in China, we doubt it will be long before …
20th 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
Overview – Aside from the temporary blockade of the Suez Canal, March was a relatively uneventful month for industrial metals prices. Nevertheless, we still expect prices to fall this year as mine supply rebounds, particularly in Latin America, at a time …
9th 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