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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
Imports to remain weak for some time yet Despite a bounce-back in India’s imports of gold last month, China’s imports remained in the doldrums. Gold imports by both countries should rise in the months ahead, but a full recovery still appears to be a long …
25th August 2020
Boom in Chinese production to continue The contraction in global steel production continued to ease in July. This improvement remains led by a surge in Chinese production resulting from a state-sponsored rise in infrastructure spending, which is set to be …
24th August 2020
Robust supply to continue to weigh on the aluminium price The continued increase in production in July helps to explain why the price of aluminium has been a relative underperformer so far this year. And with yet more additions to China’s smelting …
20th August 2020
We expect the price of nickel to make further gains between now and the end of 2021. The ongoing rise in the production of stainless steel in China will be the main factor supporting demand, while the ban on Indonesian ore exports should keep supply …
14th August 2020
We had previously expected the global platinum market to flip into a surplus this year as the measures taken to contain the coronavirus weighed on most types of demand for the metal. However, in light of our recently revised real yields forecast, we now …
Earlier this week, the gold price broke through the previous record set back in 2011 to reach an all-time high. Given that we now expect real yields to continue to grind lower, we have revised upwards our gold price forecast to $2,100 per ounce by …
7th August 2020
Last week saw the zinc price return to its pre-pandemic level, making it the second in the S&P GSCI of Industrial Metals to do so after copper. But unlike copper, we expect the zinc market to remain oversupplied for the foreseeable future. Accordingly, we …
6th August 2020
The latest China import data tally with our view that constrained supply will help to push the prices of most base metals higher. Conversely, the surge in iron ore shipments is consistent with our forecast that a rise in supply will send the price of iron …
3rd August 2020
Overview – Despite base metals prices already nearing pre-virus levels, we think that the rally has further to run. The key factor underpinning our positive outlook is the planned policy stimulus in China, much of which will take the form of …
31st July 2020
China’s bounce-back won’t be replicated elsewhere The contraction in global steel production eased for the second month in a row in June, offering further evidence that the worst of the downturn is now behind us. But global steel production will take much …
23rd July 2020
We have raised our forecast for the gold price, as we expect real yields to drift a little lower and remain low for some time. We now think that the price of gold will finish the year at $1,900 per ounce ($1,600 previously) and will remain elevated over …
21st July 2020
Downside risks to output growing, but market to remain oversupplied Global aluminium output growth slowed slightly in June. However, given the colossal hit to demand seen in the first half of the year, we still expect the market to be hugely oversupplied …
20th July 2020
At face value, the rally in the copper price to above its pre-virus level suggests that the coronavirus pandemic has led to an overall improvement in the metal’s fundamental outlook. While a little counter-intuitive, we think this idea is less far-fetched …
17th July 2020
New data released by the London Metal Exchange (LME) confirm our view that there has been an increase in off-exchange stocks this year, particularly for aluminium. Admittedly, there are limitations to the data, but they still underpin our forecast that …
16th July 2020
Now that quarantine restrictions are being lifted, mine supply should recover But still-high rates of infection in Latin America may act as a constraint The risks look largest for copper, but iron ore supply could also take a hit In this Metals Watch , we …
10th July 2020
We recently raised our price forecasts for base metals, including lead, as we now forecast a quicker economic rebound in China. And though we expect lead’s near-term price recovery to be driven by reviving car sales, a faster shift towards EVs will weigh …
8th July 2020
Overview – June was another good month for industrial metals. The prices of base metals made further gains, although those used in steel alloys (e.g. zinc and nickel) performed less well as wet weather in Southern China disrupted construction projects, …
3rd July 2020
China’s import data are another sign that demand is bouncing back in the world’s largest metal consumer. However, in some cases, a lack of supply is restricting shipments. This is likely to become more of an issue in the months ahead and is another reason …
30th June 2020
It is by no means inevitable that the coronavirus crisis puts a big permanent hole in the supply capacity of economies (i.e. their ability to produce goods and services). With the right government policies, many economies should be able more or less to …
29th June 2020
Recovery in physical gold demand to take some time Imports of gold into China and India in May were little changed from the previous month and continue to paint a grim picture for physical demand in the world’s top gold importing nations . We expect …
25th June 2020
Reports that the US is considering rescinding Canada’s exemption to its 10% tariff on aluminium this week are unlikely to have much of an impact on the metal’s price . But such moves have the potential to worsen the oversupply in the global market, acting …
24th June 2020
Past the worst, but output still likely to contract this year In a pattern that has become all too familiar, steel output grew in May in China but fell sharply elsewhere. We expect steel output both in and outside China to pick up in the months ahead, but …
22nd June 2020
Stronger than expected Chinese recovery to keep market well-supplied Global aluminium output growth picked up a little pace in May. With demand in China now increasing quicker than we had previously expected, it is likely that Chinese aluminium output …
We have turned more positive on the outlook for the price of tin. China’s demand is coming back strongly after a virus-related slump and, in the more medium-term, tin will benefit from its heavy use in new technologies. At the same time, supply is …
19th June 2020
We think that the recovery in equity prices has further to run, and now expect an even swifter economic rebound in China. Accordingly, we have raised our base metal price forecasts, which now show a return to their pre-virus levels as early as next year …
18th June 2020
Soaring Chinese imports of platinum group metals (PGM) could be taken as a sign that end-use is racing back towards its pre-virus level. However, we think that higher imports merely reflect opportunistic buying. Accordingly, we continue to expect only a …
11th June 2020
This year’s rally in the gold price has come on the back of a coronavirus-led surge in safe-haven buying and a plunge in interest rate expectations. More recently, however, we suspect that the uptick in the gold price has come from investors positioning …
10th June 2020
We expect the palladium market to remain in a deficit this year as both demand and supply plummet. Palladium supply should bounce back reasonably quickly, but the medium-term outlook for palladium demand from the auto sector is much harder to call. On …
4th June 2020
Overview – May was a good month for metals prices. (See Chart 1). The ongoing revival in economic activity in China helped to lift the prices of most industrial metals, while investment demand for precious metals remained strong. We think that industrial …
3rd June 2020
Exchange stocks are best used to judge the breadth of the downturn in metal demand, rather than the depth. With that in mind, we think that exchange stocks will help to tell us when demand for metal has started to recover, though they will probably …
So far, there is only limited evidence that a lack of raw material is constraining output at Chinese smelters. But we think that will change in the months ahead. In our view, output is still most likely to be curbed at copper and nickel smelters, which is …
29th May 2020
Imports likely to have troughed in April, but any improvement to be gradual The latest data couldn’t be clearer: gold demand in the top two importing nations all but vanished in April. Imports should rise in the months ahead but will remain low by past …
26th May 2020
China’s dominance over global steel supply to grow The latest data add to the evidence of a growing divergence in the trend in steel output between China and the rest of the world. And as infrastructure spending in China is stepped up over the coming …
22nd May 2020
The fiscal stimulus announced today at the National People’s Congress in China failed to make much of a splash in metals markets. Nevertheless, we think it will underpin stronger iron ore demand this year . Although infrastructure spending will be a key …
Significant output cuts still look unlikely Global aluminium output growth slowed further in April. However, with demand in China now picking up as its economy emerges from lockdown, the possibility of substantial output declines there appears slim. …
20th May 2020
The silver price has historically been influenced by industrial metals and gold prices As a safe haven, silver has disappointed relative to gold Going forward, we expect the silver price to underperform gold through to end-2020 Silver is often described …
18th May 2020
The virus-led increase in exchange stocks is reminiscent of the GFC But changes in warehouse economics will keep a lid on stocks Nonetheless, we expect stocks to rise and remain high for some time In this Metals Watch , we take a closer look at whether …
6th May 2020
Overview – The prices of most commodities struggled in April against a backdrop of moribund global demand. That said, the performance of energy commodities was mixed: while Brent crude and Henry Hub gas rose in price, the other energy commodities fell. We …
5th May 2020
Investment demand likely to dwindle While a surge in ETF inflows offset weak physical demand in Q1, we don’t expect this to be repeated over the coming quarters. After all, many of the factors that have boosted the investment appeal of gold are likely to …
30th April 2020
The incentives offered by China’s provincial governments will artificially boost demand for base metals, especially lead and zinc. As a result, smelters who may have cut supply or shut altogether may instead maintain or even increase output, which will …
29th April 2020
India’s gold imports to test historic lows Imports of gold into China and India continued to contract at a double-digit pace in March. But the plunge in physical demand has had little impact on the gold price, as it has been outweighed by strong …
27th April 2020
Overview – Measures designed to contain the spread of coronavirus have dealt a heavy blow to metals demand. Assuming that these measures are lifted at a global level in the second half of the year, we expect a small pick-up in industrial metals prices by …
