• Reflecting the sustained strength in iron ore prices, NAB’s Non-Rural Commodity Price Index is forecast to increase by 0.4% qoq in Q2 2019 (having previously expected a modest decline).
• The outlook for commodities is essentially unchanged –with the profile of declines in iron ore prices (as supply recovers) pushed out by a quarter. That said, uncertainty has risen given the re-escalation in US-China trade tensions.
• In annual average terms, the USD index is forecast to rise by 2.2% in 2019, before declining by 5.4% in 2020. Iron ore and (to a lesser extent) metallurgical coal are the main contributors to this decline.
• The changes are larger in AUD terms, with the index rising by 6.0% in 2019 then falling by 12.0% in 2020.

Find out more in the NAB Minerals & Energy Outlook – May 2019