Commodity prices might hike less than expected in the upcoming years
With the new middle classes in the BRICS countries as well as in other emerging economies the new driver of commodity price increases might continue in the next years to increase consumption and demand for commodity based goods. Especially in Asia an increasing demand is expected. But there are also increasingly counter dynamics on the supply side including huge energy reserves such as shell gas in the US that become accessible with new technologies.
Adding to assumable easing effects in the energy field a slight but continuous decline in volumes of oil consumption needs to be considered as well as a rapidly aging society with less consumption intensities in Asia, and Europe and new recycling technologies.
This is why leading analysts have recently adjusted their forecasts for commodity prices to lower levels while the aftermath of the current crisis might still have effects of increase in the mid term as investments have slowed in recent time. In opposite to the prices hikes that could occur in the short term, an increasing value of technology suppliers in the field of exploration and recycling might probably go hand in hand with long term dynamics. Gold and other precious metals have already recently shown that their performance in increasingly independent from commodity prices and their volatility.
This entry was posted by Niko Wolff on September 1, 2011 at 1:45 pm, and is filed under Commodities, Finance. Follow any responses to this post through RSS 2.0.
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