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We forecast that the price of aluminium will rise this year even if, as we expect, the market flips from a deficit to a surplus. This is due to our expectation that investors will focus on a more positive backdrop for aluminium demand, amid low inventory …
3rd January 2020
Weaker demand and output cuts to further weigh on production Global steel output dropped in m/m terms in November, led by China. We think that global production will remain weak in the coming months due to softer demand growth and pre-announced output …
20th December 2019
Global output to bounce back in 2020 Global aluminium production continued to falter in November, largely due to another sharp fall in Chinese output. But additions to China’s capacity coupled with a resumption of shuttered smelters should lay the …
The muted market reaction to news of a provisional trade deal between the US and China lends weight to our view that the trade war’s grip on metals markets will ease over the coming year. While we are bearish on the outlook for iron ore and Chinese steel, …
17th December 2019
After scaling a multi-year high in 2019, we forecast that iron ore prices will fall back over the coming years. This is premised on the continued return of supply from Brazil and Australia following major disruptions earlier this year, as well as a marked …
13th December 2019
In our view, the outlook for copper prices over the next twelve months is positive. Supply is unlikely to recover nearly as quickly as many assume following major disruptions this year, and demand should at least stabilise. In addition, exchange stocks of …
9th December 2019
Despite somewhat more encouraging economic data releases, industrial metals prices struggled to find direction in November mainly owing to the ongoing uncertainty surrounding US-China trade negotiations. We think most base metal prices will rise next year …
5th December 2019
President Trump’s decision to impose tariffs on imports of steel and aluminium from Brazil and Argentina is likely to have little impact on prices. And while this could be interpreted as a sign that tariffs on the remaining “List 4” imports from China …
4th December 2019
Following the recent correction in the nickel price, we now think there is room for it to rise next year. We expect a large loss of supply and a recovery in demand to yield a deeper market deficit, forcing drawdowns in both reported and unreported …
28th November 2019
Sluggish demand is being reflected in falling supply Global steel production continued to contract y/y in October, and we think it will remain weak in the coming months given subdued economic growth in key consuming regions . The World Steel Association …
26th November 2019
Few signs of a rebound in imports around the corner Gold imports by China and India remained at historically low levels in October. Our view is that the gold price rally is now behind us, and that ongoing weakness in consumer demand will be one of the …
25th November 2019
In our view, market participants have recently become too downbeat on the prospects for lead. In fact, we think there are several reasons to expect the price of lead to rebound in the year ahead . At first glance, the near-10% fall in the price of lead …
22nd November 2019
Global production may have turned a corner Global aluminium output ticked up on a monthly basis in October, in large part due to the ongoing ramp-up of new capacity in Bahrain. It now looks likely that global production will be broadly flat this year as …
20th November 2019
The price of zinc has risen a little since its recent low in September on the back of unanticipated disruptions to supply. But we expect it to fall back again next year, premised on a rebound in supply at a time of subdued demand growth . The price of …
19th November 2019
We think that aluminium consumption figures are being flattered by a resurgence in off-exchange stockpiling. As such, and contrary to consensus expectations of a market deficit in 2019, we think that the aluminium market is currently comfortably supplied …
14th November 2019
Our forecast of a downturn in China’s property sector bodes ill for the price of Chinese steel. Moreover, falling iron ore prices and a bleak outlook for China’s steel exports will add to the downward pressure . The price of Chinese steel rebar has ticked …
13th November 2019
We have revised up our end-2020 forecasts for the prices of gold and silver as we now expect a smaller rise in US Treasury yields next year. That said, we retain our view that a softening in safe-haven and consumer demand will cause the prices of gold and …
8th November 2019
A cocktail of an apparent softening of US-China trade tensions coupled with several supply outages pushed the prices of most base metals higher in October. Perhaps somewhat unusually, the price of gold also gained ground as investors remain concerned …
6th November 2019
Overview – We have revised up our end-2020 forecast for the prices of gold and silver to reflect the fact that we now expect roughly as much monetary easing by the Fed as the market. Meanwhile, we have trimmed our price forecasts for most base metals but …
1st November 2019
Output cuts by Chinese smelters mean that the price of tin is unlikely to fall further in the coming quarters. But with growth in major consumers set to slow and tin particularly exposed to “List 4” US tariffs on China, we see little upside for prices in …
31st October 2019
Output to pick up from here, but not by much Temporary shutdowns in China and Japan caused annual growth in global steel production growth to contract in September. We expect production to bounce back a little as these temporary factors fade, though …
25th October 2019
Consumer demand to remain in the doldrums Gold imports by China and India fell once again in September. With the Chinese economy set to slow and Indian consumer preferences slowly drifting away from gold , Asian physical demand is likely to remain weak …
Getting close to the trough Global aluminium output contracted again in September. But with a recovery in Chinese and Canadian production likely in the coming months, global aluminium supply may now be close to bottoming out . According to the …
21st October 2019
Despite the latest “mini-deal”, we think it is only a matter of time before trade tensions between the US and China escalate again. Either way, we think that the recovery in global economic growth that we expect over the course of 2020 will be a far …
15th October 2019
On the whole, dwindling exchange stocks have had a muted impact on prices this year as global growth has slowed. But as inventories creep towards critical lows, this sets the scene for a sustained recovery in prices in 2020 if, as we expect, global growth …
11th October 2019
At first glance, weak global aluminium output so far this year can be chalked up to the slump in prices. However, lower Chinese production growth has more to do with government-led crackdowns on excess capacity which should continue even if, as we expect, …
9th October 2019
Strikes at South African mines would hit global supply of platinum and palladium hard But given stronger demand growth and lower stocks in the palladium market … … strikes would give much more of a boost to the price of palladium There is a significant …
4th October 2019
After some fleeting optimism on the back of an apparent easing in US-China trade tensions in September, the recent run of weak US survey data saw demand concerns return to the fore. We think that global economic growth will slow further over the coming …
3rd October 2019
With question marks hanging over the outlook for global economic growth, it has become increasingly difficult to get a handle on the true state of physical copper demand. Therefore, we have turned to the Capital Economics Copper Demand Proxy for answers. …
2nd October 2019
August uptick to prove a flash in the pan An upturn in Chinese output lifted global steel production growth out of the doldrums in August. But with environmental cuts being stepped up, and construction activity set to falter, we doubt this will last. As …
26th September 2019
Physical demand unlikely to recover this year Gold imports in China and India remained extremely weak in August. With local currency prices likely to stay elevated, and growth in China set to slow, a turnaround in demand is unlikely anytime soon . Data …
25th September 2019
Supply continues to stutter, but not by enough to boost prices Global aluminium production fell again in August, and we think this contraction could deepen in the months ahead. Despite this, we forecast that the price of aluminium will fall a little …
20th September 2019
We estimate that 190,000 tonnes of refined nickel have flowed into unreported stocks since 2017. In other words, nickel stocks are much higher than official numbers indicate. This supports our view that nickel prices will decline next year even if …
Smelter outages in China have led to a surge in the ShFE price of aluminium, and there is mounting speculation that the LME price will soon follow suit. We disagree. In contrast, our in-house model suggests that aluminium prices will fall in the coming …
18th September 2019
Surging Chinese smelter output and faltering demand mean we think that zinc prices are set to drop by more than 15% by the end of this year and are unlikely to start recovering until the second half of 2020 . Our long-held bearishness on zinc prices has …
12th September 2019
While we are revising up our once-bullish end-2019 forecasts for the prices of gold and silver, we think that the price rally this year has now run its course. Next year, we expect a recovery in bond yields and a rise in investor risk appetite to push …
11th September 2019
We expect worries about the escalating US-China trade war and prospects for the global economy to continue to drive metals prices in the coming months. Precious metals are benefitting from the uncertainty, but there have been renewed falls in industrial …
6th September 2019
Indonesia’s announcement of an imminent ban on exports of nickel ore has sent nickel prices to a five-year high. While trending higher initially, we expect prices to slump next year as supply is incentivised . Last Friday, Indonesia - the world’s largest …
3rd September 2019
The next round of US tariffs on Chinese imports pose a key risk to metals demand While the direct effects across the base metals will vary, tin is likely to suffer most But the indirect effects of an escalating trade war will weigh on metals prices …
29th August 2019
Gold imports set to remain in the doldrums Gold’s price rally saw Indian and Chinese imports continue to tumble in July. And, given that prices have risen further in August, gold imports could record multi-year lows in the second half of 2019 . Data …
28th August 2019
Ailing demand means steel production slump will continue July’s slowdown in steel production was probably a sign of things to come given environmental restrictions, squeezed margins and soft demand in China. Nonetheless, steel prices look set to fall …
27th August 2019
We think that a recovery in refined lead production, ailing demand, and elevated trade tensions should cause the price of lead to drop by almost 15% by end-2019 . To recap, LME lead prices have risen robustly this summer, despite a broad-based decline in …
23rd August 2019
Prospect of H2 rebound has diminished Global aluminium production remained in the doldrums in July. We had previously expected smelter ramp-ups and lower input costs to spur a recovery in China’s output in the second half of 2019. But this now looks less …
20th August 2019
We forecast that a weaker South African rand coupled with the high prices of by-products at platinum mines will mean that the price of platinum stays firmly in the doldrums over the next couple of years . After years of a falling or lacklustre platinum …
19th August 2019
Copper prices are hovering near two-year lows, reflecting investor concerns about the outlook for global growth. While dwindling mine supply should put a floor under prices, deteriorating investor sentiment will probably prevent any meaningful rebound …
16th August 2019
Glencore’s decision to temporarily close the world’s largest cobalt mine by the end of this year has given cobalt prices a shot in the arm. As a result, the price of cobalt could rally by more than 60% by end-2021 as demand surges and the market swings …
13th August 2019
Nickel prices have surged in recent weeks, owing to optimism over future demand from the electric vehicle sector and speculation that Indonesia’s ban on nickel ore exports could be brought forward from 2022. But the rally isn’t justified by current …
9th August 2019
Iron ore prices have plunged by a sixth so far in August and we think that rebounding output and slower Chinese demand growth will mean that prices will fall by a further 20% to $80 per tonne by end-2019 . Disruptions to supply from the three largest …
7th August 2019
Despite sharp declines in recent days, we expect the prices of most industrial metals to fall further this year as demand falters in the wake of slower global economic growth. We are particularly negative on the outlook for Chinese steel and iron ore …
6th August 2019
Gold demand to plateau over the rest of 2019 Central bank buying and ETF inflows underpinned robust demand for gold in the first half of 2019. While we think that strong official sector buying will continue, ETFs may start to see outflows as investors …
1st August 2019