Overview

A range of key commodities have trended higher in recent months, including iron ore, crude oil and base metals, supported by the global economic recovery and expectations of further stimulus.

• That said, COVID-19 continues to present some uncertainty around the outlook, particularly with the rollout of vaccines to emerging markets lagging that of advanced economies. This could negatively impact the supply of a number of commodities.
• We have revised several forecasts higher, meaning that our non-rural commodity price index is forecast to increase by over 11% in 2021 in US dollar terms. That said, NAB also forecasts a sizeable strengthening in the Australian dollar, which results in a 3.8% fall in the index in AUD terms this year.
• Weaker policy support (particularly in China) and the unwinding of some supply constraints means we see commodity prices broadly falling in 2022 – down by 9.8% in US dollar terms.

Find out more in the Minerals & Energy Outlook March 2021