Buyers And Sellers
Purchasing.Com looks at the economy and doesn't like what it sees.
* Weak demand, excess supply depresses copperEvery one of those items is an input to some producer. So all those items that are bad news for producers are good news for users.
* Titanium shipments are forecast to slide 5-15%
* Magnesium demand is off, prices are down
* Iron ore prices seen falling 30% in 2009
* Diesel’s monthly average is at a four-year low
* Semiconductor industry to drop 5.8% in China
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1 comment:
Um, this isnt bad news for producers, its bad news for raw materials suppliers. Producers needing those commodity materials for manufacturing are going to pick up production, and lower prices on product at market, and thereby restart consumer sales.
This past summers irrational disasturbationism aside, the historical trends on all metals, fossil fuels, chemicals, etc is that their cost per unit, adjusted for inflation, is DOWN. Raw materials deflation is a long term historical trend for over a century now.
I suspect this past years commodity markets behavior was a function of a handful of countries using their sovereign wealth funds to manipulate prices in order to trigger an economic crisis that would get Obama elected. Now that government has been changed, the need to artificially manipulate the economy is not beneficial.
Long term, raw materials prices will continue to drop. Food prices will drop. Energy will drop. What will go up is anything requiring large fractions of technology in their cost basis (electronics, software, etc) as more and more man hours of labor are put into successive generations of products that are Moore's Law Compliant.
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