The state of the resources market

The question on everyone’s mind for the past few weeks has been; can this rally keep going? In their latest report, Paul Bloxham, Chief Economist at HSBC, answers just that question. “There are arguments in both directions, although we favour the view that commodity prices have probably troughed.” They see a dip in average commodity prices in 2016, but are now forecasting a rise in 2017 on the back of higher oil prices. “We strongly believe that prices around current levels are unsustainable in the longer term. We cannot rule out a near-term price correction after the recent rally, but view a return to the low levels of early 2016 as highly unlikely.“ The outlook for iron ore, however, is not so rosy. “As the wave of liquidity pulls back, the focus will shift back to fundamentals, which are not very encouraging. We believe that stagnating demand, excess supply and cost deflation will make the current rally in ore prices unsustainable.” See the attached report for the full details.

2 topics

Livewire News brings you a wide range of financial insights with a focus on Global Macro, Fixed Income, Currencies and Commodities.


No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.