Goldman Sachs, an international investment bank, said that despite the collapse of the global commodity market, it is now in the worst situation since 2008, but the pain of the bulls is not yet over.
Goldman Sachs analyst EdMorse said in a report that "excess supply and a weak global economy mean that it is difficult to measure" commodity prices have bottomed out. â€
The report said it is bearish on the price outlook for crude oil, aluminum, platinum, iron ore, cocoa and wheat in the next 3-6 months.
According to the report, raw material prices are still near the lowest level in 16 years, as demand climbs and demand in China's largest consumer country is slowing.
From cotton to zinc metal, China is almost the largest consumer of all commodities in the world.
The report also pointed out that funds are being withdrawn from commodity trading funds in metals, agricultural products and energy markets, while stock market investors have pushed down the stock prices of mining and oil exploration companies.
"The energy, industrial metals and agricultural products markets are still oversupply, mainly as a result of the slowdown in global economic growth, but excessive investment has led to new supply expansion in the last 10 years, and Tiangong has also improved crop production. Out of level."
Citi is not alone in the prospect of a bearish commodity market.
Goldman Sachs and Morgan Stanley also expect raw material prices to fall further.
The commodity index tracking 22 commodity prices has fallen sharply by 15% since June 30, or the largest quarterly decline since the fourth quarter of 2008.
Citigroup pointed out in 2012 that the super-up cycle of the commodity market has ended.
China's economic growth has slowed to its lowest level in decades, which has slowed demand for commodities, while farmers, miners and oil explorers are still expanding supplies.
However, the report reiterates that copper prices are expected to be $4,800 per ton by the end of the year and $4,500 per ton by the end of next year.
"We expect the negative factors to not disappear for the time being, so copper producers will still face pressure and have the potential to adjust production."
Goldman Sachs expects the copper market to have an excess of about 500,000 tons by at least 2019. Affected by demand risks, copper prices are still expected to be biased downward.
"The supply cuts caused by price factors confirm the current weak market demand."
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