Higher for longer.
That’s the brief synopsis of Macquarie Bank’s latest bulk commodity price forecasts with factors from both within and outside of China seeing the bank upgrade its views over the next couple of years.
“The biggest deck hike in the space was for metallurgical and thermal coal with prices for 2018-19 lifted 10-45% as we come to terms with China’s on-going coal industry shake-up, though we still believe Q1 represents a momentum peak for both commodities,” Macquarie says.
“We’ve also revised up steel and iron ore on the back of improved ex-China demand and a rising cost curve.
“The whole complex remains vulnerable to a slowdown in the Chinese housing sector, but shrinking Chinese steel capacity should prevent a rebound in Chinese steel exports, a positive for steel capacity utilisation and margins in the developed world.”
Here’s Macquarie’s latest forecasts, not only for the bulks but also base and precious metals.