Global Commodity Forecasts Industrial Raw Materials Markets Report 2021: Aluminum, Coal, Copper, Cotton, Crude Oil, Gold, Lead, LNG, Natural Gas, Natural Rubber, Nickel, Steel, Tin, Zinc

Dublin, July 01, 2021 (GLOBE NEWSWIRE) -- The "World Commodity Forecasts Industrial Raw Materials" report has been added to ResearchAndMarkets.com's offering.

The Economist Intelligence Unit's industrial raw materials (IRM) price index is expected to jump by 31.7% in 2021-the fastest rate in more than a decade-owing to surging base metals and crude oil prices.

In April and early May investor optimism about the pace of the economic recovery returned, buoyed by strong industrial activity in China and rising factory-gate prices there, as well as strong first-quarter GDP data from the US. The administration of the US president, Joe Biden, has also proposed plans for a major investment in infra-structure and manufacturing, which has further buoyed markets.

Ultimately, we expect Mr Biden's stimulus plans to be slimmed down significantly, but for now, even the prospect of a boom in US industrial demand is enough to lift IRM prices. In 2022 we expect the IRM price index to dip by 1% year on year as the global economic growth and demand for industrial commodities begin to stabilise, especially in China, following the post-pandemic rebound in 2021. Supply constraints created during the staggered economic recovery in 2021 should also ease in 2022, removing some of the upward pressure on IRM prices.

Base metal prices slumped in the first half of 2020 as the onset of the coronavirus pandemic depressed industrial activity and consumer demand worldwide. However, prices jumped in the final months of 2020 owing to the resurgence in industrial activity in China, supply constraints related to the pandemic and heavy stockpiling of industrial raw materials by China.

This trend has continued in the first half of 2021, further raising the prices of several major industrial metals, including copper, aluminium, zinc and tin, as well as precious metals that are heavily used in the electric vehicle (EV) sector, such as palladium. Overall, policy-led decisions to rein in the supply of some industrial materials and metals in China, together with continued demand from major emerging sectors-including EVs-will keep a floor under base metal prices in 2021-22, despite market volatility. We expect the base metals price sub-index to surge by 38.9% in 2021, before easing back in 2022 as demand stabilises.

The price of aluminium, which has the highest weighting in the metals index, fell by 5% in 2020, extending the nearly 15% fall recorded in 2019 as slowing global GDP growth weighed on consumption. Prices are expected to return to growth in 2021, surging by 28%, before falling by 11.1% in 2022 as the market adjusts to new demand patterns and stock levels.

US import tariffs on aluminium products will continue to exacerbate the divergence in prices, with supplies being diverted to markets outside the US. The price of copper, which also carries a significant weight in the metals index, is forecast to jump by nearly 48% year on year in 2021, supported by rapid growth in the EV industry (copper is one of the main components in batteries). Competition between the US and China in the EV sector is expected to intensify in the coming years, driving copper prices up by a further 2.8% in 2022.

That said, the copper market is vulnerable to demand from China, the world's biggest consumer of the metal. If China's economic growth were to fall below our expectations, for example if rising debt levels prompted a sharp reduction in public investment, this would push copper prices down.

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