Abans Group Commodity World Round Up

28th Dec – 01st Jan

1 .Copper outperforms other metals in 2020

Dec 31, 2020

Copper is on track for annual gains, and is leading the tally amongst other base metals, thanks to the gradual recovery of the global economy. Starting from the last summer, several economies saw signs of gradual recovery, thanks to the containment of the outbreak, which boosted economic growth, thus demand for copper and other commodities have rebounded. Copper performance improved in the last few months, based on multiple factors, led by a drop in the US dollar against most of it peers, optimism about monetary stimulus packages in the US and other major countries, and a decline in copper supply.

Source: economies.com

2.WTI Crude suffers 20.5% loss in 2020

Dec 31, 2020

For the year, WTI dropped 20.5%, based on front-month contracts, according to Dow Jones market data. However, fundamentally, crude ended the year on a positive note, amidst signs of a pickup in demand, and as major producers curbed output, as a reaction to the COVID-19 pandemic. WTI plunged into negative territory for the first time ever in April. WTI logged a 7% rise for December, contributing to a fourth-quarter gain of 20.6%.

Source: Market Watch

3.Oil outlook for 2021 hit by new COVID-19 strain

Dec 31, 2020

The poll of 39 economists and analysts conducted in the second half of December forecast Brent crude prices are expected to average $50.67 per barrel next year. A new coronavirus variant and related travel restrictions have threatened the already weakened fuel demand. Oil demand recovery will depend on the pace of deployment of the vaccines being developed to combat the virus, analysts said, with some expecting no return to pre-pandemic levels before late 2022 or 2023.

Source: Reuters

4.OPEC+ Compliance continues to exceed 100%

Dec 30, 2020

OPEC+ fully complied with the supply cuts in November that the group agreed on. OPEC+ is scheduled to meet on January 4, to discuss how much the Group will produce in February and beyond. The Group is also set to meet monthly, in order to determine the production quotas for the following month, after weighing market conditions, OPEC’s compliance for November reached 104%. Compliance for OPEC’s allies—a group that includes Russia—reached just 95%. Combined, the overall compliance rate for November for OPEC+ was therefore 101%, almost exactly the same as the Group's compliance in October 2020.

Source: Reuters

5.Gold caps its best year in a decade

Dec 31, 2020

Gold posted the biggest annual advance in a decade after a tumultuous year, with gains this month aided by the dollar’s decline to the lowest level since April, 2018. Much of gold’s performance next year will depend on whether the eventual return to normality is outweighed by ongoing stimulative policies. Led by Fed Chair, Jerome Powell, the U.S. Federal Reserve has signalled that its ultra-easy monetary conditions will last throughout 2021. Efforts to pass further fiscal stimulus through the Senate have hit another roadblock.

Source: Bloomberg

6.Silver set to shine in 2021

Jan 1, 2021

The pandemic triggered stockpiling by investors looking to protect their wealth. This, alongside supply deficits, pushed gold and palladium prices up by more than 20% this year, while silver rose 47%, and platinum 10%. Silver is also an industrial metal used in products, including solar panels. It climbed to $18 an ounce in January to almost $30 in August, before slipping to around $25. Silver has a dual role (Precious & Industrial Metals) and its greater volatility means it could fare better than gold, as economic growth picks up, and as U.S. President-elect Joe Biden’s push into clean energy prompts more usage.

Source: Reuters

7.Natural Gas could see a swift demand recovery in 2021

Dec 31, 2020

Liquefied natural gas traders anticipate a swift demand recovery in 2021, after a year in which the coronavirus pandemic prompted dramatic price swings. Demand for the fuel used in heating and power generation is growing faster than for any other fossil fuel, as nations look for a cheap, reliable, and cleaner alternatives to coal. The pandemic derailed that growth for 2020, but China and India are emerging as major sources of demand. Global gas demand is expected to resume its growth next year.

Source: The Print

8.China’s appeal to cut steel output

Dec 30, 2020

China has urged the steel industry to produce less crude steel next year amidst the government’s carbon neutrality plan. As the world’s largest producer of steel at 1.1 billion tonnes in 2020, China has shut down 150 million tonnes of annual production capacity from 2016-2020. Output cut can further improve the steel sector’s supply and demand situation. Reasonable control of steel production can safeguard profit margins of mills, and prevent high prices from getting transferred to the downstream sectors.

Source: Mining .com