Commodity demand appears to be turning up, based on our assessment of global industrial activity. As demand picks up, we expect industrial commodity prices will move higher (Chart of the Week, top panel). For all practical purposes,…
Prices for iron ore and steel have come back to earth, following their impressive rallies this year. However, copper prices languished, and retreated to $2.50/lb on the COMEX. This, despite a contraction of physical copper…
Away from the Sino-U.S. trade-war headlines – and the remarkable commodity price volatility they produce – apparent steel consumption in China is up 9.5% y/y in the first seven months of this year. This is being spurred by…
Highlights The current global trade downtrend has primarily been due to a contraction in Chinese imports. The latter reflects weakness in China's domestic demand in general and capital spending in particular. The current global…
Chart II-1Is Deflation In Steel And Coal Back? Unlike 2015 when steel, iron ore and coal prices collapsed, in the current downturn they have so far held up reasonably well. They have begun falling only recently (Chart II-1).…
Highlights Central banks globally have turned dovish, with the Fed virtually promising to cut rates in July. But this will be an “insurance” cut, like 1995 and 1998, not the beginning of a pre-recessionary easing cycle.…
The influence of China’s economy on base metals prices is not unexpected: As China’s relative share of base metals supply and demand versus the rest of the world has grown, the marginal impact of its fiscal, credit,…
Highlights Coming up on the deadline for President Trump’s China – U.S. tariff ultimatum, tariffs on $200 billion of Chinese imports could go to 25% from 10% on Friday – the outlook for base metals remains complicated,…
The table above shows the relationships between the year-on-year (y/y) percent changes in base metals, and the LME index (LMEX) versus the big correlations we have identified over the years with these metals: BCA’s GIA…
The upturn we anticipated in China’s industrial output in the wake of fiscal and monetary stimulus is becoming more visible. Accommodative central banks, along with a likely resolution of the Sino – U.S. trade war, will…