China pushes up Global commodity prices in 2009
The Global commodities have always been depending mostly on the demand from the developed world till few years back. But slowly and steadily the demand balance has been shifting to the developing world, at least for the top industrial commodities like copper, aluminum, lead, iron ore and crude oil.
In the last two years, the demand for industrial commodities have been down in the developed world, yet the price of these commodities went up substantially.
Who had so much of buying power that was more than enough to make up for the loss of volumes from the developed world ?
The answer is China. Yes, China was single handedly able to push up the commodity prices in the year 2008 and 2009, by buying up as much as it can consistently, month after month.
So the copper prices went up by over 50% from the all time lows, whereas the crude oil prices shot up by over 100% from their low levels. Other commodity prices also were up by hefty percentages.
The coming year could be really testing for most of the commodities, thanks to expected slow down in Chinese demand, say experts. Even if China demand is going to be growing slowly, there could be higher growth in demand for commodities from US and other developed countries.