Futuríveis
terça-feira, abril 12, 2005
The commodities boom
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Never has there been a commodities boom like it. Not only oil but also copper and iron ore are fetching record prices, while aluminium and zinc have in the past few weeks hit their highest levels for many years. Copper has more than doubled in value in the past two years and recent long-term iron ore contracts agreed by Japanese steelmakers have been at prices nearly three-quarters higher than last year.
The gains have not been limited to metals and minerals: coffee, at five-year highs, and raw sugar are both at least 50 per cent up on last year. This is the first time that there has been such a strong synchronised rise across so many different commodities.
The increases have driven up the shares of global energy and mining stocks and boosted the economies of commodity-rich countries. But inflation is also starting to rise and there are increasing fears that high commodity prices are going to squeeze corporate profits and global economic growth.
Is this just a normal commodities cycle of boom followed by bust - or are there structural reasons for believing it will continue for longer than normal? The International Monetary Fund warned last week of a "permanent oil shock" that will result in sustained high oil prices over the next two decades. Citigroup has talked of a "super-cycle", characterised by an extended period of high demand for raw materials, and Goldman Sachs suggests oil prices, currently about $57 a barrel, may exceed $100 in what it terms a "super-spike".
The price of oil has almost doubled in the past two years and is nearly 30 per cent higher so far this year. But as Michael Lewis, head of commodities research at Deutsche Bank, points out, oil price surges in the early 1970s and in 1979-80 were not accompanied by a broader climb in commodity prices.
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Stock and bond markets, which usually fall when commodities are rising, have remained relatively resilient so far. But the equity market rally has stalled in recent weeks - partly because of record oil prices - and long-term bond yields have risen on increased inflation concerns. One reason that market sentiment has in general been relaxed, however, is that many analysts continue to expect the commodity price rises to be temporary. Another is that developed-world economies are less dependent on oil than they were 25 years ago.
Despite rising oil prices, world economic growth is estimated to have hit 5 per cent last year, according to the IMF - the fastest rate since 1976, while oil prices were at their highest levels in real terms since the mid-1980s. "Nobody knows where oil prices start to hurt economic growth," says one executive with a large US hedge fund. "Last year, people thought it was over $40, then they started to think it was $50. We have passed those two levels and we are still seeing strong demand for oil, so right now the question is, 'How high does the price go before it starts destroying demand?'."
Even though oil demand has risen by more than 50 per cent over the past 30 years, its share of global gross domestic product has fallen. That reflects advances in technology, the increased dependence of western countries on services rather than manufacturing, and efficiency and productivity gains. This is one reason why economists believe the global economy is not heading towards imminent recession.
But the world could still be approaching a period of slower growth. Can the Japanese economy, which imports nearly all its oil, maintain its recovery with crude prices at these levels? The higher price has already led to forecasts for European growth this year being cut. It has also helped drive up the US trade deficit - the world's largest consumer of oil spent about $175bn on importing energy related products last year, about one-third of the entire US trade deficit and up by a third on the previous year.
In any case, the threat to the global economy remains potent, not least through inflation, as factory costs rise and manufacturers are pressed into passing on higher costs to consumers. Financial markets would be more nervous if any significant commodities reached new highs in real terms. Yet those prices would have to rise far higher if they were to consume a similar share of consumer spending as in 1980, when oil prices spiked to a level that - adjusting for inflation - would have been about $80 a barrel. Goldman Sachs said last month that oil would have to reach more than $135 before it took the same 6 per cent share of US personal disposable income as then
...
FT.com
Never has there been a commodities boom like it. Not only oil but also copper and iron ore are fetching record prices, while aluminium and zinc have in the past few weeks hit their highest levels for many years. Copper has more than doubled in value in the past two years and recent long-term iron ore contracts agreed by Japanese steelmakers have been at prices nearly three-quarters higher than last year.
The gains have not been limited to metals and minerals: coffee, at five-year highs, and raw sugar are both at least 50 per cent up on last year. This is the first time that there has been such a strong synchronised rise across so many different commodities.
The increases have driven up the shares of global energy and mining stocks and boosted the economies of commodity-rich countries. But inflation is also starting to rise and there are increasing fears that high commodity prices are going to squeeze corporate profits and global economic growth.
Is this just a normal commodities cycle of boom followed by bust - or are there structural reasons for believing it will continue for longer than normal? The International Monetary Fund warned last week of a "permanent oil shock" that will result in sustained high oil prices over the next two decades. Citigroup has talked of a "super-cycle", characterised by an extended period of high demand for raw materials, and Goldman Sachs suggests oil prices, currently about $57 a barrel, may exceed $100 in what it terms a "super-spike".
The price of oil has almost doubled in the past two years and is nearly 30 per cent higher so far this year. But as Michael Lewis, head of commodities research at Deutsche Bank, points out, oil price surges in the early 1970s and in 1979-80 were not accompanied by a broader climb in commodity prices.
...
Stock and bond markets, which usually fall when commodities are rising, have remained relatively resilient so far. But the equity market rally has stalled in recent weeks - partly because of record oil prices - and long-term bond yields have risen on increased inflation concerns. One reason that market sentiment has in general been relaxed, however, is that many analysts continue to expect the commodity price rises to be temporary. Another is that developed-world economies are less dependent on oil than they were 25 years ago.
Despite rising oil prices, world economic growth is estimated to have hit 5 per cent last year, according to the IMF - the fastest rate since 1976, while oil prices were at their highest levels in real terms since the mid-1980s. "Nobody knows where oil prices start to hurt economic growth," says one executive with a large US hedge fund. "Last year, people thought it was over $40, then they started to think it was $50. We have passed those two levels and we are still seeing strong demand for oil, so right now the question is, 'How high does the price go before it starts destroying demand?'."
Even though oil demand has risen by more than 50 per cent over the past 30 years, its share of global gross domestic product has fallen. That reflects advances in technology, the increased dependence of western countries on services rather than manufacturing, and efficiency and productivity gains. This is one reason why economists believe the global economy is not heading towards imminent recession.
But the world could still be approaching a period of slower growth. Can the Japanese economy, which imports nearly all its oil, maintain its recovery with crude prices at these levels? The higher price has already led to forecasts for European growth this year being cut. It has also helped drive up the US trade deficit - the world's largest consumer of oil spent about $175bn on importing energy related products last year, about one-third of the entire US trade deficit and up by a third on the previous year.
In any case, the threat to the global economy remains potent, not least through inflation, as factory costs rise and manufacturers are pressed into passing on higher costs to consumers. Financial markets would be more nervous if any significant commodities reached new highs in real terms. Yet those prices would have to rise far higher if they were to consume a similar share of consumer spending as in 1980, when oil prices spiked to a level that - adjusting for inflation - would have been about $80 a barrel. Goldman Sachs said last month that oil would have to reach more than $135 before it took the same 6 per cent share of US personal disposable income as then
...
FT.com
posted by CMT, 11:58 da tarde