ShreeMetalPrices: Goldman Sachs reduced its projection of US recession to 25% over robust labour data; Commodity Outlook 2023


Goldman Sachs reduced its projection for the US going into recession within the next 12 months to 25% versus 35% previously. While 60% of analysts surveyed by Reuters in Dec predicted that a recession will occur in 2023.

The bank stated in a research report that “continued growth in the labour market with early signs of progress there in business surveys indicated that the likelihood of a near-term recession has lessened significantly.”

The revised projection comes in the wake of a Friday employment report that revealed the U.S. job market remained persistently tight in January despite a significant acceleration in job growth and a more nearly to 53-1/2 year low in jobless rate of 3.4%.

Commodity Outlook 2023 for Metals and Energy

According to Goldman Sachs (NYSE:GS), China’s reopening will mark a rough start to 2023. Economists estimate that whole reopening will barely increase copper consumption by 0.5%. This may indicate significant restocking boosts to onshore 2023 consumption for copper (800kt) and aluminium (550kt).

In 2nd quarter of 2023, it is expected that non-OPEC oil production outside of the US will completely stop. Due to the large decrease in even maintenance expenditures, production is seeing steeper fall rates.

When compared to the demand growth nearly 2.0 million b/d in 2023. Oil supply may struggle to attain 1.1 million b/d. However, due to storage issues, energy resources are one of the least expected commodities, eroding the connection among future and current supply availability.

In order to restore low inventory, we should observe an increase in restocking demands throughout the supply chain.

Chinese coal consumption has increased, which is mostly responsible for the increase in emissions. Global emissions are changing as a result of the energy crisis. While China has set a 25% growth in its goal for the share of renewables in energy usage by 2030.

Northwest European emissions will need to rise to sustain their energy use using less efficient alternatives.