- The Latest from the Copper Briefing Service
- Will supply of some commodities prove insufficient to meet demand even during a recession?
July 11th 2008 - With economic growth slowing, the continuing high prices of some commodities are bewildering many people. Where these commodities are important either for people's survival (food) or votes (crude oil and then petrol and diesel) high prices are attracting political attention, with the supposed influence of speculators under the microscope. Index funds and other investors in commodities have also had some attention and there have been proposals before the US Senate to ban big institutional investors from participating in the crude oil market. Conspiracy theories have resurfaced. Antitrust officials have raided the office of grain traders and distributers in two EU countries. In base metals, David Threkeld has had an open letter to the LME's Martin Abbott published in Metal Bulletin. Mr Threkeld reckons that the copper market was in surplus by 750 kt in 2007 not deficit [we disagree]. READ MORE...
- Read Peter Hollands' Article "Speculators, Index Investors and Prices" here.
- Latest from the Quarterly Report on Copper
- Refined copper consumption reduced due to global economic weakness and higher oil prices.
June 30th 2008 - When we last reported, in the first quarter, we were assuming a relatively mild deceleration in economic growth in the first half of 2008 but, from a global perspective, still a fairly robust rate of growth. We were then expecting global industrial production (IP) growth to slow from 6% per annum in both 2006 and 2007 only to around 5% per annum in both 2008 and 2009. We were then expecting the next global, once-per decade recession to occur in 2010, with a period of negative year-on-year IP growth. We then expected IP growth to recover to 4% in 2011 and 6% in 2012.
Then in April, we underwent a major change of view on the macroeconomic front, advancing our assumed roughly once per decade recession from 2010 to late 2008-early 2009. We saw this spreading from North America and Japan in late 2008, to Europe and some other Asian countries in early 2009.
In May and June, the issue of stagflation (stagnation in economic growth combined with inflation) began to appear more and more in the headlines. High oil and food prices have raised inflation rates generally and, in Europe at least, have increased the likelihood that the next shift in interest rates will be upwards. If the USA and other countries follow suit, the risk is a widespread and potentially deep recession. As CHR Metals says in the June issue of its Global IP Watch, “Central banks may wish to cut interest rates in order to
stimulate demand but, instead, are being forced to hold rates steady, or even increase them, as inflation returns as a major scourge. While there may be a debate about the justification for oil prices threatening to break above $150/bbl, there is little doubt about the negative impact on growth prospects and inevitably on demand for oil products.”
- Latest Presentations
- Metal Bulletin's 21st Copper Conference - Bulgaria, June 2008 - PDF
- International Copper Study Group Meeting - Lisbon, April 2008 - PDF
- IQPC Commodities Conference - New York, April 2008 - PDF
