LOOKING AHEAD

If there's anyone still around who doesn't know 2015 was a terrible year for commodities he's probably a contractor in the troglodyte business.

A business associate of ours is in the scap metal business, much of which he sells overseas. Over the past 12 or so months he's had to cut his business so thin if he could bottle it it would be a top seller on a late night infomercial for weight loss.

You know there's big trouble in paradise when the current downturn is the longest since they started keeping records. But wait. There may be light at the end of that tunnel after all.

Guess what, it’s official: 2015 was a terrible year for commodities. Analysis is starting to flow into inboxes of those involved in the business, and all appear to confirm that 2015 was a crushing year for commodities, with little joy forecast for this year.

The Bloomberg Commodity Index (BCOM), a measure of investor returns in raw materials, tumbled 25% in 2015, a fifth straight annual loss and the longest slide since the data began in 1991.

Cotton was the only gainer out of 22 individual commodity indices for the year. Crude oil was the worst performer, tumbling 45% on a supply glut.

Copper, aluminum, zinc, and nickel capped annual losses, with nickel dropping 43%, the worst performer in the Bloomberg Industrial Metals Index (BCOMIN).

Citi strategist David Wilson said that a “significant proportion” of refined nickel drawn into China throughout 2015 could have been used to meet growing financing demand for nickel, rather than real end-use demand.

In the year to November, China imported around 258,000 mt of refined nickel and 626,000 mt (gross tonnes) of ferronickel, volumes being up 108% and 146% on the year, respectively, “levels not consistent with the negative stainless melt rate growth trends seen within China last year.” Nickel is a key alloy in stainless steel.

The first day of trading in 2016 saw nickel prices fall by around $300/mt, continuing the price downtrend seen through Q4 2015. The three-months nickel price closed the London Metal Exchange kerb session Monday at $8,505/mt. The metal started 2015 around $15,500/mt. More:

blogs.platts.com/2016/01/06/all-eyes-on-2017-metals