top of page
  • Audere Research

Commodities Monthly Roundup ~ October 4th

The dominant theme for September was the potential fall out of the debt crisis in China, or more specifically Evergrande, and the effect this could have on world markets. Additionally, Chinese Regulatory moves are proving unnerving and increasingly business and investor unfriendly. Inflation fears have returned to the central bank discourse in the West and supply chain bottlenecks are curtailing economic resurgence. As the northern hemisphere heads back into winter, relaxations of Covid 19 strategies will soon expose whether the vaccination programmes have been successful. Tensions between China and the West, particularly the USA, UK and Australia are rising as Beijing flexes its muscle in the South China sea.


Brent enjoyed a strong month in spite of the negative issues impacting markets in September, reaching a high of $80.75 and gaining 7.6% for the month. Bank of America has boldly stated that Brent may top $100/bbl if strong trade, low stockpiles and an air travel rebound collide with a colder winter. Energy shortages in China and Europe ahead of winter may see OPEC+ adjust their strategy and increase supply. At the timing of writing this article, OPEC+ were meeting to discuss supply issues. A failure to agree a boost to supplies will be bullish for oil.

Asia remains the preferred destination for LNG cargoes and Europe will require high prices to attract cargoes in a tight physical market.


Fears of a slowdown in the Chinese economy resulted in a selloff of 6% in copper for September, together with a fall in Nickel and Lead. Copper was also negatively impacted by resurgent discussions on US tapering. The supply and demand equation for copper should remain very tight, even with market-wide uncertainties and a global energy crunch.

Continued aluminium shortages bucked the trend with the metal managing a 5.19% gain for the month. The Brazilian steel and aluminium sectors are preparing for a period of short electricity supply in the coming months due to continued drought conditions which may impact supply of both steel and aluminium.

Precious Metals

Gold has been trading in a $1,730 to $1,830 range since June with the Fed taper, inflation and the USD providing a cap, and geopolitical tensions and the Evergrande debt crisis supporting a floor. Near term technical postures for both gold and silver continue to invite short sales although risk aversion continues to limit the downside.

Palladium remains under pressure, having sold-off a whopping 23% in September, with attention now turning to the 200-week moving average at $1,768.

News Links

From Disaster To Dreamland: Gulf Economies Are Exploding in 2021

Bank Of America: Energy Crunch Could Lead To $100 Oil And Economic Crisis

Column: China energy crunch may boost overseas metal producers

Column: China energy crunch may boost overseas metal producers | Reuters

Indian Oil linked to six-figure LNG fixture as open ships become hard to find. Enquiry for LNG tonnage turns upwards upping expectations for charter rates

Fossil fuel demand shakes off pandemic in blow to climate fight

US secondary aluminium alloy prices soar to new highs on silicon gains

METALS-Shortages help aluminium towards 13-year highs

METALS-London copper set for weekly loss on China, Evergrande worries

REFILE-METALS-London copper edges higher as Chinese power worry calms

Energy and transport costs blamed for new steel price hike

Iron ore storms past $US100 as China soothes Evergrande concerns

GLOBAL ZINC & LEAD WRAP: Supply, logistics issues keep zinc premiums rising in Europe, US; signs of demand growth in Southeast Asia

Gold futures retreat as Treasury yields edge higher

Precious Metals Update: Gold Forecast High Goes Bye-Bye

Gold price analysis: how likely is a breakout in October?

Call +44 (0) 203 884 992 to discuss further with an advisor.

Recent Posts

See All

Read via Portal GB Pound What happened last week? ↑ Sterling traded quietly despite the Bank of England raising interest rates by 25bps. What to watch for in the short-term? ↓The Bank of England meeti

Read via Portal GB Pound What happened last week? ↑ Sterling was happy to sit out a lot of the bank stress movements last week and ended the week higher against the euro and USD What to watch for in t

Read via Portal GB Pound What happened last week? ↑ Sterling reacted positively last week given news of the collapse of Silicon Valley Bank although the pound lacks a number of safe haven characterist

bottom of page