Copper mine in Uzbekistan
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Metal prices have recently fallen sharply on the futures markets. This is not an all-clear for inflation, because if you look at the longer-term price development, the problem is more than clear.
When it comes to inflation, energy and food prices receive particular attention. In Europe, natural gas costs five times the average price over the past six years, while corn, wheat and soybeans cost one and a half times the average price over the past 60 years. But the prices of industrial products are also rising, partly because of high energy prices. According to the Federal Statistical Office, prices for intermediate goods rose by a quarter in May compared to the previous year. Metals in particular have become significantly more expensive with an increase of 38 percent – pig iron, steel and ferroalloys cost more than half more than in the previous year, reinforcing steel 72 percent, aluminum in raw form 42 percent more.
Martin Hock
Editor in Business.
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The development on the futures markets seems to have been completely contrary to this. On the London Metal Exchange, prices have fallen by around a third on average over the past three months, and the price of nickel, which is primarily required for steel production, has fallen by more than half. However, this impression is put into perspective when looking at the long-term price trend. Starting from the lows that metal prices had reached in March 2020, they had initially more than doubled. The price of tin even rose by a factor of 2.7 and that of nickel by a factor of 3.4. So it’s no wonder that the prices of these metals have recently fallen the most. The bottom line, however, is that the prices of industrial metals, apart from lead, are currently more than 20 percent above the average for the past 15 years, so they are still expensive.