Metals Harden Up On Demand Jazz

Most metals see a spike in prices on bullish market speculation over commodities rally and a rapid revival in demand from across the world

- Lola Nayar

Metal prices are on the roll driven by market speculation and revival in demand for raw materials mainly in China, the US, and Europe. The trend, which started around a year-and-a-half ago in metals like steel and aluminum, has now spilled over to base metals like copper and brass.

Global trends are causing an adverse impact on India where, despite lower production costs, buyers are paying a higher import parity price. “In the last six months, steel prices, in particular, have spiraled side by side with aluminum, copper, and brass,” says Mahesh Desai, Chairman of the Engineering Export Promotion Council of India.

Most metals have seen over 50 per cent hike in input costs, while the rise was almost 70 per cent in steelmaking, over the last six months. The spike has been more since April in some metals.

A report compiled by International Banker states that commodities have been the “best performer” throughout much of 2020, particularly the second half of the year, as the Chinese economy revived faster than expected and a weak American dollar and supply challenges provided support to the prices, states the report. The S&P Goldman Sachs industrial metals index, which is part of the benchmark S&P Goldman Sachs Commodities Index (S&P GSCI), gained around 40 per cent between June and December, with copper, aluminum, nickel and zinc experiencing pronounced rallies.