Overview

• In USD terms, NAB’s Non-Rural Commodity Price Index is forecast to increase by 2.7% qoq in Q1 2019 – driven almost entirely by the upturn in iron ore prices.
• That said, the outlook for our index is largely unchanged – with the stronger prices for iron ore (driven by the supply issues in Brazil) essentially offset by a weaker outlook for Liquefied Natural Gas (LNG).
• In annual average terms, the USD index is forecast to rise by just 0.5% in 2019, before declining by 3.1% in 2020 – with a softer profile for iron ore and metallurgical coal the main contributors.
• The changes in AUD terms are somewhat larger – reflecting NAB’s forecasts for a stronger Aussie dollar from the second half of 2019 onwards – with the index increasing by 4.2% this year and falling by almost 10% in 2020.

Find out more in the NAB Minerals Energy Outlook – February 2019