With global growth weakening and developed economies entering a prolonged phase of slowdown, analysts have been forecasting the end of the past couple of years. However, commodities have started rallying again, with industrial production picking up in several developed economies. Commodity prices closely track industrial production, which is why every time in China’s growth and industrial data show even a modest uptick, commodities start moving up. Analysts, however, are of the opinion that this bounce back in unlikely to last beyond December. However both fundamental and technical indicators suggest that the up pick may not last.
Prices of commodities, like any other product, are not only driven by demand but even supply. So a pick-up in the global economy will have a bearing on prices but eventually, the level of supply in the system will have a bigger bearing on prices than demand. Commodity analysts say that during the 1980s and 1990s when global industrial production averaged 3.7 per cent annum, commodity prices fell by 4 percent a year. But prices picked up after 2000 when demand from emerging markets, namely China, picked up. Also, supply could not keep pace with the incremental demand. The historical relationship between global industrial growth and commodity prices dell from 2000 onwards.
Consequently, analysts are of the view that even now when global industrial production is up, the prices of commodities will not revive meaningfully. Today, growth in emerging market has a greater bearing on commodity prices than that in developed economies. Credit Suisse says: “It is clear that after showing a relatively poor fit up until the new millennium, emerging market industrial production growth has correlated very well with changes in broad measures of commodity prices over the past the decades. This relationship has held very well over the past couple of years, suggesting that the dramatic slowdown in EM IP growth has been the main factor dragging commodity prices lower in past few years”.
So even as growth picks up in other parts of the world and commodity prices may respond to that in the coming three months, 2014 will likely be tepid as emerging markets will continue to see slower growth. Iron ore, copper, and gold are expected to fall meaningfully over next year, while tin, silver, Brent and nickel nay remain flat. Credit Suisse expects Brent futures to trade within a band of $ 100-120 a barrel with oil demand growing at 1 percent per annum. Brent is estimated to trade at $ 105 a barrel over the next three months, with upside risks related to geo-political reason. Also, global commodity giants such as Rio Tinto and BHP Billiton have been increasing capacities for several commodities over the past few years. Even if demand picks up, supply issues will keep prices depressed.

With global growth weakening and developed economies entering a prolonged phase of slowdown, analysts have been forecasting the end of the past couple of years. However, commodities have started rallying again, with industrial production picking up in several developed economies. Commodity prices closely track industrial production, which is why every time in China’s growth and industrial data show even a modest uptick, commodities start moving up. Analysts, however, are of the opinion that this bounce back in unlikely to last beyond December. However both fundamental and technical indicators suggest that the up pick may not last.
Prices of commodities, like any other product, are not only driven by demand but even supply. So a pick-up in the global economy will have a bearing on prices but eventually, the level of supply in the system will have a bigger bearing on prices than demand. Commodity analysts say that during the 1980s and 1990s when global industrial production averaged 3.7 per cent annum, commodity prices fell by 4 percent a year. But prices picked up after 2000 when demand from emerging markets, namely China, picked up. Also, supply could not keep pace with the incremental demand. The historical relationship between global industrial growth and commodity prices dell from 2000 onwards.
Consequently, analysts are of the view that even now when global industrial production is up, the prices of commodities will not revive meaningfully. Today, growth in emerging market has a greater bearing on commodity prices than that in developed economies. Credit Suisse says: “It is clear that after showing a relatively poor fit up until the new millennium, emerging market industrial production growth has correlated very well with changes in broad measures of commodity prices over the past the decades. This relationship has held very well over the past couple of years, suggesting that the dramatic slowdown in EM IP growth has been the main factor dragging commodity prices lower in past few years”.
So even as growth picks up in other parts of the world and commodity prices may respond to that in the coming three months, 2014 will likely be tepid as emerging markets will continue to see slower growth. Iron ore, copper, and gold are expected to fall meaningfully over next year, while tin, silver, Brent and nickel nay remain flat. Credit Suisse expects Brent futures to trade within a band of $ 100-120 a barrel with oil demand growing at 1 percent per annum. Brent is estimated to trade at $ 105 a barrel over the next three months, with upside risks related to geo-political reason. Also, global commodity giants such as Rio Tinto and BHP Billiton have been increasing capacities for several commodities over the past few years. Even if demand picks up, supply issues will keep prices depressed.

With global growth weakening and developed economies entering a prolonged phase of slowdown, analysts have been forecasting the end of the past couple of years. However, commodities have started rallying again, with industrial production picking up in several developed economies. Commodity prices closely track industrial production, which is why every time in China’s growth and industrial data show even a modest uptick, commodities start moving up. Analysts, however, are of the opinion that this bounce back in unlikely to last beyond December. However both fundamental and technical indicators suggest that the up pick may not last.
Prices of commodities, like any other product, are not only driven by demand but even supply. So a pick-up in the global economy will have a bearing on prices but eventually, the level of supply in the system will have a bigger bearing on prices than demand. Commodity analysts say that during the 1980s and 1990s when global industrial production averaged 3.7 per cent annum, commodity prices fell by 4 percent a year. But prices picked up after 2000 when demand from emerging markets, namely China, picked up. Also, supply could not keep pace with the incremental demand. The historical relationship between global industrial growth and commodity prices dell from 2000 onwards.
Consequently, analysts are of the view that even now when global industrial production is up, the prices of commodities will not revive meaningfully. Today, growth in emerging market has a greater bearing on commodity prices than that in developed economies. Credit Suisse says: “It is clear that after showing a relatively poor fit up until the new millennium, emerging market industrial production growth has correlated very well with changes in broad measures of commodity prices over the past the decades. This relationship has held very well over the past couple of years, suggesting that the dramatic slowdown in EM IP growth has been the main factor dragging commodity prices lower in past few years”.
So even as growth picks up in other parts of the world and commodity prices may respond to that in the coming three months, 2014 will likely be tepid as emerging markets will continue to see slower growth. Iron ore, copper, and gold are expected to fall meaningfully over next year, while tin, silver, Brent and nickel nay remain flat. Credit Suisse expects Brent futures to trade within a band of $ 100-120 a barrel with oil demand growing at 1 percent per annum. Brent is estimated to trade at $ 105 a barrel over the next three months, with upside risks related to geo-political reason. Also, global commodity giants such as Rio Tinto and BHP Billiton have been increasing capacities for several commodities over the past few years. Even if demand picks up, supply issues will keep prices depressed.

With global growth weakening and developed economies entering a prolonged phase of slowdown, analysts have been forecasting the end of the past couple of years. However, commodities have started rallying again, with industrial production picking up in several developed economies. Commodity prices closely track industrial production, which is why every time in China’s growth and industrial data show even a modest uptick, commodities start moving up. Analysts, however, are of the opinion that this bounce back in unlikely to last beyond December. However both fundamental and technical indicators suggest that the up pick may not last.
Prices of commodities, like any other product, are not only driven by demand but even supply. So a pick-up in the global economy will have a bearing on prices but eventually, the level of supply in the system will have a bigger bearing on prices than demand. Commodity analysts say that during the 1980s and 1990s when global industrial production averaged 3.7 per cent annum, commodity prices fell by 4 percent a year. But prices picked up after 2000 when demand from emerging markets, namely China, picked up. Also, supply could not keep pace with the incremental demand. The historical relationship between global industrial growth and commodity prices dell from 2000 onwards.
Consequently, analysts are of the view that even now when global industrial production is up, the prices of commodities will not revive meaningfully. Today, growth in emerging market has a greater bearing on commodity prices than that in developed economies. Credit Suisse says: “It is clear that after showing a relatively poor fit up until the new millennium, emerging market industrial production growth has correlated very well with changes in broad measures of commodity prices over the past the decades. This relationship has held very well over the past couple of years, suggesting that the dramatic slowdown in EM IP growth has been the main factor dragging commodity prices lower in past few years”.
So even as growth picks up in other parts of the world and commodity prices may respond to that in the coming three months, 2014 will likely be tepid as emerging markets will continue to see slower growth. Iron ore, copper, and gold are expected to fall meaningfully over next year, while tin, silver, Brent and nickel nay remain flat. Credit Suisse expects Brent futures to trade within a band of $ 100-120 a barrel with oil demand growing at 1 percent per annum. Brent is estimated to trade at $ 105 a barrel over the next three months, with upside risks related to geo-political reason. Also, global commodity giants such as Rio Tinto and BHP Billiton have been increasing capacities for several commodities over the past few years. Even if demand picks up, supply issues will keep prices depressed.

With global growth weakening and developed economies entering a prolonged phase of slowdown, analysts have been forecasting the end of the past couple of years. However, commodities have started rallying again, with industrial production picking up in several developed economies. Commodity prices closely track industrial production, which is why every time in China’s growth and industrial data show even a modest uptick, commodities start moving up. Analysts, however, are of the opinion that this bounce back in unlikely to last beyond December. However both fundamental and technical indicators suggest that the up pick may not last.
Prices of commodities, like any other product, are not only driven by demand but even supply. So a pick-up in the global economy will have a bearing on prices but eventually, the level of supply in the system will have a bigger bearing on prices than demand. Commodity analysts say that during the 1980s and 1990s when global industrial production averaged 3.7 per cent annum, commodity prices fell by 4 percent a year. But prices picked up after 2000 when demand from emerging markets, namely China, picked up. Also, supply could not keep pace with the incremental demand. The historical relationship between global industrial growth and commodity prices dell from 2000 onwards.
Consequently, analysts are of the view that even now when global industrial production is up, the prices of commodities will not revive meaningfully. Today, growth in emerging market has a greater bearing on commodity prices than that in developed economies. Credit Suisse says: “It is clear that after showing a relatively poor fit up until the new millennium, emerging market industrial production growth has correlated very well with changes in broad measures of commodity prices over the past the decades. This relationship has held very well over the past couple of years, suggesting that the dramatic slowdown in EM IP growth has been the main factor dragging commodity prices lower in past few years”.
So even as growth picks up in other parts of the world and commodity prices may respond to that in the coming three months, 2014 will likely be tepid as emerging markets will continue to see slower growth. Iron ore, copper, and gold are expected to fall meaningfully over next year, while tin, silver, Brent and nickel nay remain flat. Credit Suisse expects Brent futures to trade within a band of $ 100-120 a barrel with oil demand growing at 1 percent per annum. Brent is estimated to trade at $ 105 a barrel over the next three months, with upside risks related to geo-political reason. Also, global commodity giants such as Rio Tinto and BHP Billiton have been increasing capacities for several commodities over the past few years. Even if demand picks up, supply issues will keep prices depressed.

With global growth weakening and developed economies entering a prolonged phase of slowdown, analysts have been forecasting the end of the past couple of years. However, commodities have started rallying again, with industrial production picking up in several developed economies. Commodity prices closely track industrial production, which is why every time in China’s growth and industrial data show even a modest uptick, commodities start moving up. Analysts, however, are of the opinion that this bounce back in unlikely to last beyond December. However both fundamental and technical indicators suggest that the up pick may not last.
Prices of commodities, like any other product, are not only driven by demand but even supply. So a pick-up in the global economy will have a bearing on prices but eventually, the level of supply in the system will have a bigger bearing on prices than demand. Commodity analysts say that during the 1980s and 1990s when global industrial production averaged 3.7 per cent annum, commodity prices fell by 4 percent a year. But prices picked up after 2000 when demand from emerging markets, namely China, picked up. Also, supply could not keep pace with the incremental demand. The historical relationship between global industrial growth and commodity prices dell from 2000 onwards.
Consequently, analysts are of the view that even now when global industrial production is up, the prices of commodities will not revive meaningfully. Today, growth in emerging market has a greater bearing on commodity prices than that in developed economies. Credit Suisse says: “It is clear that after showing a relatively poor fit up until the new millennium, emerging market industrial production growth has correlated very well with changes in broad measures of commodity prices over the past the decades. This relationship has held very well over the past couple of years, suggesting that the dramatic slowdown in EM IP growth has been the main factor dragging commodity prices lower in past few years”.
So even as growth picks up in other parts of the world and commodity prices may respond to that in the coming three months, 2014 will likely be tepid as emerging markets will continue to see slower growth. Iron ore, copper, and gold are expected to fall meaningfully over next year, while tin, silver, Brent and nickel nay remain flat. Credit Suisse expects Brent futures to trade within a band of $ 100-120 a barrel with oil demand growing at 1 percent per annum. Brent is estimated to trade at $ 105 a barrel over the next three months, with upside risks related to geo-political reason. Also, global commodity giants such as Rio Tinto and BHP Billiton have been increasing capacities for several commodities over the past few years. Even if demand picks up, supply issues will keep prices depressed.

With global growth weakening and developed economies entering a prolonged phase of slowdown, analysts have been forecasting the end of the past couple of years. However, commodities have started rallying again, with industrial production picking up in several developed economies. Commodity prices closely track industrial production, which is why every time in China’s growth and industrial data show even a modest uptick, commodities start moving up. Analysts, however, are of the opinion that this bounce back in unlikely to last beyond December. However both fundamental and technical indicators suggest that the up pick may not last.
Prices of commodities, like any other product, are not only driven by demand but even supply. So a pick-up in the global economy will have a bearing on prices but eventually, the level of supply in the system will have a bigger bearing on prices than demand. Commodity analysts say that during the 1980s and 1990s when global industrial production averaged 3.7 per cent annum, commodity prices fell by 4 percent a year. But prices picked up after 2000 when demand from emerging markets, namely China, picked up. Also, supply could not keep pace with the incremental demand. The historical relationship between global industrial growth and commodity prices dell from 2000 onwards.
Consequently, analysts are of the view that even now when global industrial production is up, the prices of commodities will not revive meaningfully. Today, growth in emerging market has a greater bearing on commodity prices than that in developed economies. Credit Suisse says: “It is clear that after showing a relatively poor fit up until the new millennium, emerging market industrial production growth has correlated very well with changes in broad measures of commodity prices over the past the decades. This relationship has held very well over the past couple of years, suggesting that the dramatic slowdown in EM IP growth has been the main factor dragging commodity prices lower in past few years”.
So even as growth picks up in other parts of the world and commodity prices may respond to that in the coming three months, 2014 will likely be tepid as emerging markets will continue to see slower growth. Iron ore, copper, and gold are expected to fall meaningfully over next year, while tin, silver, Brent and nickel nay remain flat. Credit Suisse expects Brent futures to trade within a band of $ 100-120 a barrel with oil demand growing at 1 percent per annum. Brent is estimated to trade at $ 105 a barrel over the next three months, with upside risks related to geo-political reason. Also, global commodity giants such as Rio Tinto and BHP Billiton have been increasing capacities for several commodities over the past few years. Even if demand picks up, supply issues will keep prices depressed.

With global growth weakening and developed economies entering a prolonged phase of slowdown, analysts have been forecasting the end of the past couple of years. However, commodities have started rallying again, with industrial production picking up in several developed economies. Commodity prices closely track industrial production, which is why every time in China’s growth and industrial data show even a modest uptick, commodities start moving up. Analysts, however, are of the opinion that this bounce back in unlikely to last beyond December. However both fundamental and technical indicators suggest that the up pick may not last.
Prices of commodities, like any other product, are not only driven by demand but even supply. So a pick-up in the global economy will have a bearing on prices but eventually, the level of supply in the system will have a bigger bearing on prices than demand. Commodity analysts say that during the 1980s and 1990s when global industrial production averaged 3.7 per cent annum, commodity prices fell by 4 percent a year. But prices picked up after 2000 when demand from emerging markets, namely China, picked up. Also, supply could not keep pace with the incremental demand. The historical relationship between global industrial growth and commodity prices dell from 2000 onwards.
Consequently, analysts are of the view that even now when global industrial production is up, the prices of commodities will not revive meaningfully. Today, growth in emerging market has a greater bearing on commodity prices than that in developed economies. Credit Suisse says: “It is clear that after showing a relatively poor fit up until the new millennium, emerging market industrial production growth has correlated very well with changes in broad measures of commodity prices over the past the decades. This relationship has held very well over the past couple of years, suggesting that the dramatic slowdown in EM IP growth has been the main factor dragging commodity prices lower in past few years”.
So even as growth picks up in other parts of the world and commodity prices may respond to that in the coming three months, 2014 will likely be tepid as emerging markets will continue to see slower growth. Iron ore, copper, and gold are expected to fall meaningfully over next year, while tin, silver, Brent and nickel nay remain flat. Credit Suisse expects Brent futures to trade within a band of $ 100-120 a barrel with oil demand growing at 1 percent per annum. Brent is estimated to trade at $ 105 a barrel over the next three months, with upside risks related to geo-political reason. Also, global commodity giants such as Rio Tinto and BHP Billiton have been increasing capacities for several commodities over the past few years. Even if demand picks up, supply issues will keep prices depressed.

With global growth weakening and developed economies entering a prolonged phase of slowdown, analysts have been forecasting the end of the past couple of years. However, commodities have started rallying again, with industrial production picking up in several developed economies. Commodity prices closely track industrial production, which is why every time in China’s growth and industrial data show even a modest uptick, commodities start moving up. Analysts, however, are of the opinion that this bounce back in unlikely to last beyond December. However both fundamental and technical indicators suggest that the up pick may not last.
Prices of commodities, like any other product, are not only driven by demand but even supply. So a pick-up in the global economy will have a bearing on prices but eventually, the level of supply in the system will have a bigger bearing on prices than demand. Commodity analysts say that during the 1980s and 1990s when global industrial production averaged 3.7 per cent annum, commodity prices fell by 4 percent a year. But prices picked up after 2000 when demand from emerging markets, namely China, picked up. Also, supply could not keep pace with the incremental demand. The historical relationship between global industrial growth and commodity prices dell from 2000 onwards.
Consequently, analysts are of the view that even now when global industrial production is up, the prices of commodities will not revive meaningfully. Today, growth in emerging market has a greater bearing on commodity prices than that in developed economies. Credit Suisse says: “It is clear that after showing a relatively poor fit up until the new millennium, emerging market industrial production growth has correlated very well with changes in broad measures of commodity prices over the past the decades. This relationship has held very well over the past couple of years, suggesting that the dramatic slowdown in EM IP growth has been the main factor dragging commodity prices lower in past few years”.
So even as growth picks up in other parts of the world and commodity prices may respond to that in the coming three months, 2014 will likely be tepid as emerging markets will continue to see slower growth. Iron ore, copper, and gold are expected to fall meaningfully over next year, while tin, silver, Brent and nickel nay remain flat. Credit Suisse expects Brent futures to trade within a band of $ 100-120 a barrel with oil demand growing at 1 percent per annum. Brent is estimated to trade at $ 105 a barrel over the next three months, with upside risks related to geo-political reason. Also, global commodity giants such as Rio Tinto and BHP Billiton have been increasing capacities for several commodities over the past few years. Even if demand picks up, supply issues will keep prices depressed.

With global growth weakening and developed economies entering a prolonged phase of slowdown, analysts have been forecasting the end of the past couple of years. However, commodities have started rallying again, with industrial production picking up in several developed economies. Commodity prices closely track industrial production, which is why every time in China’s growth and industrial data show even a modest uptick, commodities start moving up. Analysts, however, are of the opinion that this bounce back in unlikely to last beyond December. However both fundamental and technical indicators suggest that the up pick may not last.
Prices of commodities, like any other product, are not only driven by demand but even supply. So a pick-up in the global economy will have a bearing on prices but eventually, the level of supply in the system will have a bigger bearing on prices than demand. Commodity analysts say that during the 1980s and 1990s when global industrial production averaged 3.7 per cent annum, commodity prices fell by 4 percent a year. But prices picked up after 2000 when demand from emerging markets, namely China, picked up. Also, supply could not keep pace with the incremental demand. The historical relationship between global industrial growth and commodity prices dell from 2000 onwards.
Consequently, analysts are of the view that even now when global industrial production is up, the prices of commodities will not revive meaningfully. Today, growth in emerging market has a greater bearing on commodity prices than that in developed economies. Credit Suisse says: “It is clear that after showing a relatively poor fit up until the new millennium, emerging market industrial production growth has correlated very well with changes in broad measures of commodity prices over the past the decades. This relationship has held very well over the past couple of years, suggesting that the dramatic slowdown in EM IP growth has been the main factor dragging commodity prices lower in past few years”.
So even as growth picks up in other parts of the world and commodity prices may respond to that in the coming three months, 2014 will likely be tepid as emerging markets will continue to see slower growth. Iron ore, copper, and gold are expected to fall meaningfully over next year, while tin, silver, Brent and nickel nay remain flat. Credit Suisse expects Brent futures to trade within a band of $ 100-120 a barrel with oil demand growing at 1 percent per annum. Brent is estimated to trade at $ 105 a barrel over the next three months, with upside risks related to geo-political reason. Also, global commodity giants such as Rio Tinto and BHP Billiton have been increasing capacities for several commodities over the past few years. Even if demand picks up, supply issues will keep prices depressed.

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