https://www.engineeringnews.co.za

World Bank raises 2017 price outlook for oil and metals

20th October 2016

By: Terence Creamer

Creamer Media Editor

  

Font size: - +

The World Bank has increased its 2017 price outlook for both metals and oil in its latest ‘Commodity Markets Outlook’, raising its October forecast for crude oil to $55/bl, from $53/bl in July. It has, however, sustained its forecast for an average oil price of $43/bl in 2016.

Energy prices, which include oil, natural gas and coal, are projected to jump almost 25% overall next year, with coal prices expected to average $58/t in 2016, despite a 30% surge in thermal coal prices during third quarter of 2016.

The recent increase in coal prices to above $65/t was attributed to strong demand and tightening supply in China as a result of government restrictions on production and adverse weather conditions.

However, the bank expects coal prices to reduce during 2017 on the back of supply additions and weak demand. “China’s coal policy will be key, given that the country consumes half of the world’s coal output and coal accounts for nearly two-thirds of the country’s energy consumption.”

Metals prices are projected to rise more sharply in 2017 than forecast in July, as a result of faster-than-expected mine closures.

Metals prices rose by 4% in the third quarter, the second consecutive quarterly gain, on supply constraints, strong demand and falling stocks.

“Iron ore, nickel, tin and zinc have risen by more than 20% over the past two quarters on various supply shortfalls, while the two largest consumed metals—aluminum and copper—have seen more modest gains on ample supply and rising capacity,” the bank stated.

Zinc prices recorded the strongest gains in 2016, rising 50% from January to September, owing to ongoing supply tightness as a result of mine closures and voluntary production cuts, amidst strong steel demand.

“In 2017 metals prices are projected to increase by 4% as most markets continue to rebalance. The largest gain is for zinc, which is projected to rise more than 20%, on continued supply tightening from large mine closures.”

Meanwhile, precious metals prices, which rose 8% in the third quarter on strong investment demand and safe-haven buying, have increased by more than 20% this year. Silver led the way, surging 16%, on strong investor and industrial demand, followed by platinum, up 8%, on South African rand appreciation and tightening physical supply. Gold prices lagged these increases, but nevertheless rose 6% to average $1 335/oz.

“Precious metals prices are projected to rise 7% in 2016, mainly due to stronger investment demand,” the bank said.

Edited by Creamer Media Reporter

Comments

Showroom

Booyco Electronics
Booyco Electronics

Booyco Electronics, South African pioneer of Proximity Detection Systems, offers safety solutions for underground and surface mining, quarrying,...

VISIT SHOWROOM 
WearCheck
WearCheck

Leading condition monitoring specialists, WearCheck, help boost machinery lifespan and reduce catastrophic component failure through the scientific...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.118 0.176s - 160pq - 4rq
Subscribe Now