Re metals and oil:
Some basic materials can increase supply quickly, so high prices tend not to last long. For others, lead times can be as long as 10 years. It depends on capital requirements, barriers to entry, regulatory issues. Low prices 2014-2019, followed by the early-2020 collapse, made many producers wary of big new projects.
In the developed world, it is getting harder to get anything done. Even if the project gets the required permits from Federal, State, local, tribal, and the little old lady who lives nearby, transportation bottlenecks can make it uneconomic.
In the developing world, there is the random threat of failed states, expropriation, Marxists getting elected.
So, high prices will last years for some materials. For others, we may already have seen the peak. My take on:
Oil: Message 33381015
Iron ore: Message 33381522
Gold: Message 33367865 |
