THE outlook for a broad range of commodity prices has turned positive, with January this year marking the low point, and Chinese demand once again the dominant factor this year and in 2017.
In Macquarie’s Commodities Compendium, which showed upward revisions in a host of commodity price expectations for the next 12 months, the importance of China for global commodity demand and pricing was again underlined as the key driver for the sector after a difficult year in 2015 and at the start of this year.
“Perhaps the biggest single contributor to the stronger-than-expected commodity pricing environment this year has been the resurgence of Chinese demand as the Chinese government continues to prolong its more commodity-intensive phase of growth,” Macquarie said.
“Metals and bulk commodity markets are in the midst of a mini-renaissance, with the vast majority of those we cover showing gains over the levels seen at the start of the year. “We continue to increase our 12-month forward-demand outlook across industrial metals as the Chinese government prolongs its more commodity-intensive phase of growth, something we expect to persist through the next political transition in 2017.
“This creates a relatively short, demand-driven window of opportunity for commodity prices and commodity producers,” it said.
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