NAB’s Wellbeing Index rebounded solidly in the June quarter, after falling to its lowest point in the history of the survey. Pressures remain. But the effort required has eased.
Report
February 5, 2024
Minerals & Energy Outlook: February 2024
Weaker global growth in 2024 to drive modest commodity demand
Overview
- Following a sharp increase in US dollar prices in Q4 2023 (when they rose by 14% qoq), NAB’s Non-rural Commodity Price Index is expected to ease in Q1 2024 – down by 4.9% qoq. Weaker prices for thermal coal and liquefied natural gas (LNG) are key drivers of this downturn.
- Global economic growth is set to slow in 2024 – which should translate into more modest commodity demand conditions and downward pressure on prices. Despite markets anticipating large-scale Chinese stimulus, we believe such an outcome is unlikely, given concerns around the country’s debt levels. In particular, weak conditions in China’s property sector look likely to persist, a trend that could last multiple years.
- In annual average terms, our USD index is forecast to fall by around 9.8% in 2024, led by falling prices for thermal coal, iron ore and LNG, away from current elevated levels. The expected strengthening in the Australian dollar means a larger decline in AUD terms, down by around 15.0%.
Find out more in the Minerals Energy Outlook (February 2024)
