Find out more in NAB’s Minerals & Energy Outlook – February 2020
Minerals & Energy Outlook: February 2020
Commodity prices have generally retreated in early February in response to the Coronavirus outbreak in China.
- Following on from relatively strong prices across most markets in the first half of January, commodity prices have generally retreated in early February in response to the Coronavirus outbreak in China.
- Markets are concerned that containment measures implemented by Chinese authorities will negatively impact demand for commodities from the manufacturing and construction sectors – placing downward pressure on prices.
- The scale and duration of the outbreak is highly uncertain. In line with our global economic forecasts we assume that the greatest impact will be felt in Q1, before gradually recovering in Q2 – however there is significant risk around this outlook.
- In annual average terms, US dollar commodity prices are forecast to fall by 13.8% in 2020 – driven by falling prices for iron ore, liquefied natural gas (LNG) and metallurgical coal – followed by a further 0.9% decline in 2021.