Morgan Stanley: Commodities face a double threat in the coming months

Morgan Stanley said commodities face a double threat in the coming months, with global trade tensions likely to escalate, especially in metals, and increased consumer risks due to China's economic slowdown
.

"Escalating global trade tensions as end-user costs rise and access to materials is restricted, bringing with it the risk of
disruption to demand in commodity markets," the bank said in a quarterly report.
Meanwhile, the Chinese market is facing concerns
about a credit crunch and a slowdown in manufacturing.
”

In June, US President Donald Trump, the largest resource-consuming economy, launched another round of trade sanctions, and China, Europe and Canada took retaliatory measures, resulting in a great impact
on raw materials.

Morgan Stanley said some of its price forecasts for metals for 2018 have been revised upwards and remain cautious
.
Balancing its view, he is optimistic about oil, citing the rise in price to $90 per barrel by 2020 and providing support
for higher production costs of mineral metals.

"Demand risks are increasing, so our price platform remains a feature of a
weak outlook for most commodity markets through 2019," the bank said in a June 28 report.
Among them, copper is listed as the preferred stock after palladium, with a neutral rating
.
This is bearish for steel, nickel and coal
.

Morgan Stanley said that this month, in the energy market, New York crude is poised for its longest quarterly gain in eight years
.

Morgan Stanley said, "In addition to the direct blow to steel and aluminum, tariffs on end markets such as electronics, machinery and automobiles will also weaken demand
for the goods it supplies.
" Strong interest in demand from the EV and renewable energy sectors is justified, but it is unlikely to offset the decline
in demand from more traditional commodity end markets.
”