Key themes
Overall, we are looking for higher global economic growth next year - however, recently worries have emerged that economic growth in China is slowing down. In turn, the acceleration of growth expected in Q3 has failed to materialise and we could see a further decline in growth in Q4. However, we expect the Chinese government and central bank to keep growth stable next year. Besides the renewed focus on the risk of lower growth in China, the main factor driving commodity markets currently is abundant supplies, in particular in the global energy and grain market. Overall, we expect commodity markets to remain well supplied in 2015. However, low prices may begin to be an issue for producers as they take their toll on profits.
Oil
Further downside is limited following the recent steep decline. We expect the oil price to remain fairly stable over the coming year - we forecast Brent at USD98/bl on average in 2015. There is limited upside risk of supply disruptions on the back of geopolitical conflicts in Eastern Ukraine and Iraq. Therefore, we recommend clients on the consumer side to consider hedging their exposure at the current low levels.
Metals
Rising global growth in the coming year and the Indonesian mineral ore export ban will support prices over the coming year. However, we have revised down our forecasts on the back of the weaker outlook for the Chinese economy. Our forecasts are above forwards and we therefore recommend clients on the consumer side to lock in exposure at current low levels.
Grains
Mounting supplies are currently weighing heavily on grain prices. We have revised down our forecasts, which reflect further improvement in the outlook for supply and the relatively low risk of a disruptive El Niño later this year. Overall, our forecasts are close to forwards.
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