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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 …
Overview – Most metals prices advanced in February, with the exception of gold and silver. However, we suspect that the current prices of industrial metals look overextended, especially given the recent run of China PMIs. Accordingly, we think that …
3rd 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 …
1st March 2021
Steel output outside China to revive further in coming months Growth in global steel production slowed in January, as China’s output growth fell back. However, output ex-China picked up and we expect further gains in the coming months, not least because …
25th February 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
Overview – Industrial metals prices had a stellar 2020, with prices ending the year higher than where they started. But just as China’s strong economic recovery lifted metals prices in 2020, so will China’s slowdown in growth weigh on them in H2 2021, as …
28th January 2021
Slower production growth in China on the cards in 2021 Growth in global steel production climbed in December, once again led by a rise in China’s output. We expect growth in China’s output to slow in 2021, while ex-China output should recover lost ground. …
26th January 2021
China-led increase in global output to continue in 2021 Global aluminium production grew again in December. After a stellar 2020, we suspect that China will continue to lead the way in dragging global aluminium output growth even higher in 2021 . …
20th January 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
After staging a stellar recovery in 2020, there is considerable momentum in metals prices as we embark on the new year. That said, while prices may rise further in the near term, we think that they will start to ease back in the second half of 2021 as …
13th January 2021
Overview – The prices of industrial metals continued to surge in December, capping off a strong 2020. However, we expect that prices will fall this year as growth in China’s demand slows on the back of the gradual withdrawal of fiscal stimulus and tighter …
8th January 2021
China steel production to bounce back soon Growth in global steel production fell in November, in part because cold weather in China weighed on construction activity there. Nevertheless, we expect global output to remain high in 2021 as elevated prices …
22nd December 2020
China production boom will continue Global aluminium production held up well in November and, given the recent surge in prices, will almost certainly increase in the coming months . According to the International Aluminium Institute (IAI), global …
21st December 2020
The price of iron ore has skyrocketed recently, to over $155 per tonne. However, we think that the price will decline in 2021 as demand in China weakens at a time of rising supply . Despite lingering steel production weakness outside China (see Chart 1), …
18th December 2020
We think that industrial metals prices will ease back in 2021 primarily because we expect growth in China’s demand to slow. However, we acknowledge that there are some upside risks to our price forecasts, including the possibility that metals demand …
17th December 2020
After rising steadily in the first half of the year as virus-containment measures curbed metals consumption, exchange stocks have since started to be drawn down. While this tallies with the robust recovery in China’s demand, we think that stocks are not …
15th December 2020
We expect that the price of gold will trade at around $1,900 per ounce through 2021 as US real yields remain low. That said, we recognise that there are some key downside risks to our forecast. US nominal yields could surge and investors could intensify …
10th December 2020
Overview – Industrial metals prices rallied in November. While we expect demand growth to stay strong in the months ahead, on the back of robust economic activity in China, we think that it will slow in 2021 as the Chinese government gradually withdraws …
4th December 2020
We think that the withdrawal of fiscal stimulus in China will offset any vaccine-induced boost to metals demand in 2021. And with supply bouncing back, we expect the prices of industrial metals to dip next year. By contrast, we expect that the price of …
27th November 2020
The launch of a new copper futures contract in China should help shift pricing power in metals markets towards Asia, but the contract will not immediately become a new global benchmark . Last week, the Shanghai International Energy Exchange (INE) launched …
25th November 2020
Vaccine rollout will boost global production Despite the slight fall in China, global steel production continued to rise in October and will probably increase further in the year ahead providing that the rollout of COVID-19 vaccines is successful . …
24th November 2020
The platinum market should move into a small surplus in 2021 as demand falls and production in South Africa rebounds strongly in the wake of lighter virus-related restrictions . In its latest quarterly report, the World Platinum Investment Council (WPIC) …
20th November 2020
China aluminium production to hold up, despite winter curbs Ongoing strength in China’s aluminium production meant that global aluminium output continued to grow in October. And despite the winter environmental restrictions in China, supply there is set …
Ongoing policy stimulus in China should continue to boost investment and industrial output in the coming months. However, we expect economic activity to gradually slow by end-2021 which is why we think that prices will start to ease back next year . …
18th November 2020
While the positive developments in finding an effective vaccine against COVID-19 have boosted investor risk appetite, we still think that gold prices will remain high in the year ahead . The price of gold surged between March and August in large part due …
11th November 2020
The apparent failure of the Democratic Party to win a ‘clean sweep’ in this week’s US election means that many of the policy initiatives and spending proposals made by presidential hopeful, Joe Biden, during his campaign are likely to be – at best – …
6th November 2020
The recent strength in Asian exports reflects sustained growth in global electronics demand, which has been a factor underpinning the recent rally in industrial metals prices. We expect electronics exports to hold up well in the months ahead, which should …
4th November 2020
We think that energy commodities will claw back a bit of the ground that they have lost relative to industrial metals over the next two years or so, as some cyclical factors linked to COVID-19 which have weighed more heavily on the former unwind. However, …
3rd November 2020
Commodity prices have largely shrugged off the conclusion of China’s Fifth Plenum and discussion of the 14 th Five-Year Plan (FYP). This is not so surprising as the main takeaway from the event is that we will have to wait until March for any detail. But …
30th October 2020
A victory for the Democratic party in November’s presidential election has several potential implications for commodity markets . Very broadly, Joe Biden’s pledge to actively promote decarbonisation of the economy should accelerate the move away from …
Overview – Industrial metals prices have been among the biggest beneficiaries of the stimulus-fuelled recovery in China’s economy. But given how far prices have risen already, and that we think demand outside of China will remain lacklustre, an …
26th October 2020
China to remain the only bright spot for some time Growth in global steel production accelerated in September. However, all the growth was in China’s output. It looks increasingly likely that a revival in production elsewhere will have to wait until 2021 …
23rd October 2020
China’s aluminium output set to climb even higher Growth in global aluminium production accelerated in September, led by robust output gains in China and Canada. Capacity additions in China should mean that global output continues to rise in the fourth …
20th October 2020
Overview – Industrial metals prices fell in September on the back of the appreciation in the US dollar and fears that the re-tightening of virus containment measures in Europe and elsewhere will dampen demand growth. However, we think that …
5th October 2020
We expect the aluminium market in the decade ahead to be characterised by stubbornly low prices, as economic growth in top consumer China eventually slows and begins to drag on demand. But as consumption in other emerging markets increases and the …
30th September 2020
A higher gold price, along with the ongoing recovery in industrial demand, particularly from China, means that the price of silver is likely to rise in the year ahead . The silver price has fallen sharply in recent weeks, from a peak of around $29 per …
Headwinds rising for global steel production Global steel production continued to recover in August. However, new regulatory measures affecting the property market in China – along with the re-introduction of virus-related restrictions elsewhere – could …
24th September 2020
Despite the recent falls in the prices of precious metals, we still expect the gold price to edge higher over the coming year as US real yields drift a little lower . The gold price surged from March to early August owing to the plunge in US real yields, …
23rd September 2020
The rapid bounce-back in construction and industrial activity in China, reflected in our revamped China Activity Proxy, looks set to continue in the coming months as additional fiscal support is introduced. This underpins our forecast that most industrial …
22nd September 2020
China to continue to prop up global supply Global aluminium output remained strong in August. Production should rise in the coming months as new capacity comes on stream in China, which should act as a lid on prices . According to the International …
21st September 2020
The price of US steel has surged recently, and we think that the price will continue to rise in the year ahead as demand picks up at a time of constrained supply . After hovering at around $475 per tonne during April-August, the price of US steel (HRC) …
15th September 2020
A combination of strong demand from China and a slow recovery in global production from its virus-related trough means that the price of iron ore is likely to remain elevated for the remainder of this year. However, we expect prices to fall in 2021 as …
11th September 2020
Most industrial metals prices are now above their pre-virus levels, after rallying from their March lows. We reckon that the price rebound has further to go, as China’s impressive economic revival continues, and the backdrop for risky assets continues to …
10th September 2020
Overview – Industrial metals rallied strongly in August on the back of encouraging economic data out of China and some depreciation of the US dollar. By contrast, the price of gold eased back, after hitting an all-time high early in the month. However, …
4th September 2020