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Strategies & Market Trends : Commodities - The Coming Bull Market -- Ignore unavailable to you. Want to Upgrade?

To: craig crawford who wrote (876)	10/22/2001 11:23:38 AM
From: craig crawford	Read Replies (1) \| Respond to of 1643

COMMODITIES & AGRICULTURE: Raw material prices reduced by slowdown globalarchive.ft.com Financial Times; Oct 19, 2001 By ADRIENNE ROBERTS Industrial raw materials prices will be dragged lower by the global slowdown this year, with matters made worse by the September 11 attacks on the US, according to the Economist Intelligence Unit. Hard commodity prices are not expected to pick up until 2002, and then only modestly. The EIU says its industrial raw materials price index will decline by 7.5 per cent in 2001, before rising 3.7 per cent in 2002, finally gathering speed in 2003 with a rise of 12.8 per cent. The global economy is experiencing its steepest deceleration since the 1974 oil price shock, having slowed from an average growth rate of 4.7 per cent last year to an estimated 2.3 per cent in 2001. Demand for industrial raw materials by the construction and motor industries looks patchy at best. The EIU thinks the US construction sector's long-term prospects remain bleak. Japan's construction sector is expected to deteriorate further despite a rise in orders in July and European activity is expected to slow. The EIU thinks the downturn in US automotive sales will accelerate, adding that the September attacks dealt a blow to an already-crumbling consumer confidence. Car sales in western Europe have been relatively resilient, but Japanese sales growth appears to be faltering in spite of a strong rebound in production in the first seven months of 2001. Aluminium prices are expected to remain depressed by oversupply until mid-2002, with copper remaining weak until the second half of 2002 when demand revives. The EIU sees demand for crude oil "slackening but not falling steeply". It thinks Opec's task of matching supply with demand will become harder in 2002 and 2003 but a repetition of the 1998 price collapse or the 1979 spike is unlikely. Despite weak demand for natural rubber, the EIU thinks a shortage could develop in the next two-three years, sending prices up sharply in 2003. The nickel market is expected to go into deficit in 2002, helping prices, but oversupply could weigh on zinc for the next 18 months. Lead is expected to firm, with a deficit in 2003.