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
May 3, 2024
Minerals & Energy Outlook: May 2024
We see our NAB commodity index falling substantially in 2024, despite higher forecasts for base metals and gold.
Overview
- Recent commodity price trends have been highly mixed, with base metals and gold increasing sharply, a more modest upward trend for crude oil and steeper declines for bulk commodities. NAB’s Non-rural Commodity Price Index is weighted towards the composition of Australian resources exports, meaning that large falls in steel making commodities – led by iron ore – will drive the index lower in Q2 – currently estimated at -6.8% qoq.
- The global outlook remains subdued, including for China – the leading consumer of most commodities. Soft domestic consumption and increasing trade tensions (due to the surge in the country’s exports) offer limited growth opportunities.
- While we have revised our forecasts higher for base metals and gold, we still see our commodity index falling substantially in 2024 – down on average by 12.6%. The change to the outlook for central bank policy rates means a weaker than previously forecast profile for the Australian dollar, meaning that the fall in AUD terms is now 12.0%.
Find out more in the Minerals & Energy Outlook (May 2024)
