• We forecast the US dollar NAB’s Non-Rural Commodity Price Index to increase by 2.1% yoy in Q3 2019, however underlying trends remain highly mixed. Higher export prices for LNG and iron ore (despite more recent spot price falls) are the key contributors, while both thermal and metallurgical coal are weaker, as are most base metals.
• Global economic trends have continued to deteriorate – with trade tensions between China (the largest consumer of most commodities) and the United States increasing once again. These trends are a negative for commodities demand – placing downward pressure on prices.
• In annual average terms,US dollar commodity prices are forecast to increase by 3.4% in 2019, before declining by 7.9% in 2020. Iron ore and metallurgical coal are the primary drivers of the decline next year, while gold is trending higher.

Find out more in the NAB Minerals & Energy Outlook – August 2019