Global Commodity Forecasts Industrial Commodity Markets
Dublin, July 01, 2021 (GLOBE NEWSWIRE) – The “World Commodity Forecasts Industrial Raw Materials” report has been added to ResearchAndMarkets.com offer.
The Economist Intelligence Unit’s Industrial Commodity Price Index (IRM) is expected to jump 31.7% in 2021, the fastest rate in more than a decade due to soaring base metal prices and crude oil.
In April and early May, investor optimism about the pace of the economic recovery returned, supported by strong industrial activity in China and rising ex-factory prices in that country, as well as strong GDP data from the former. quarter from the United States. The administration of US President Joe Biden also proposed plans for a major investment in infrastructure and manufacturing, which further boosted markets.
Ultimately, we expect Mr Biden’s stimulus packages to be drastically scaled back, but for now, even the prospect of a boom in US industrial demand is enough to push up IRM prices. In 2022, we expect the MRI price index to decline 1% year on year as global economic growth and demand for industrial commodities begin to stabilize, especially in China, after the post-rebound. pandemic of 2021. The recovery in 2021 is also expected to ease in 2022, removing some of the upward pressure on MRI prices.
Base metal prices fell in the first half of 2020 as the onset of the coronavirus pandemic depressed industrial activity and consumer demand around the world. However, prices jumped in the last months of 2020 due to the resumption of industrial activity in China, supply constraints linked to the pandemic and the large storage of industrial raw materials by China.
This trend continued in the first half of 2021, further increasing the prices of several major industrial metals, including copper, aluminum, zinc and tin, as well as precious metals which are heavily used in the vehicle sector. electrical (EV), such as palladium. Overall, policy decisions to restrict the supply of certain industrial materials and metals in China, as well as continued demand from key emerging sectors, including electric vehicles, will keep base metal prices bottoming in 2021. -2022, despite the volatility of the market. We expect the base metals price sub-index to rise 38.9% in 2021, before slowing in 2022 as demand stabilizes.
The price of aluminum, which has the highest weight in the metals index, fell 5% in 2020, prolonging the nearly 15% drop recorded in 2019 as slower global GDP growth. weighed on consumption. Prices are expected to return to growth in 2021, increasing by 28%, before falling 11.1% in 2022 as the market adjusts to new demand patterns and inventory levels.
US import tariffs on aluminum products will continue to exacerbate the price divergence as supplies are diverted to markets outside the United States. The price of copper, which also weighs significantly in the metals index, is expected to jump nearly 48% year-on-year in 2021, supported by the rapid growth of the electric vehicle industry (copper is one of the main battery components). Competition between the United States and China in the electric vehicle sector is expected to intensify in the coming years, leading to a further increase in copper prices of 2.8% in 2022.
That said, the copper market is vulnerable to demand from China, the world’s largest consumer of the metal. If China’s economic growth were to fall below our expectations, for example if rising debt levels led to a sharp reduction in public investment, it would lower copper prices.
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