Overview

• While most other commodity markets tracked either sideways or drifted slightly lower in July, base metal markets continued their sharp correction – following the speculative inflow that saw prices surge in May. The exception to this trend was gold, that set yet another record high in mid-July.
• In US dollar terms, NAB’s Non-rural Commodity Price Index fell by around 7.0% qoq in Q2, and we anticipate a further 5.3% qoq decline in Q3. Bulk commodities – iron ore and coal – are the key drivers of this trend.
• At a high level, global economic conditions do not provide much support for commodity demand in the short term – given below trend economic growth forecast through to 2026, along with weak domestic demand in China and growing trade tensions with its major trading partners.
• Our commodity price forecasts are unchanged this month. NAB’s Non-rural Commodity Price Index (denominated in US dollar terms) is forecast to fall by 10.8% in 2024, and a further 14.0% in 2025 – led by coal and iron ore.

Find out more in the Minerals & Energy Outlook (August 2024)