Prices of most commodities have dropped since their peaks around the middle of this year. Some have dropped back to levels of a year ago. The question to ask is: Could this merely be indicating a large correction on the upward trend or is it an indication that this bullrun is nearing its end?
The answer has important implications for resource rich economies like SA and Australia as commodity prices will affect their export earnings and the value of their currencies.
The broad trend is shown in the CRB commodities index, a widely watched measure of global commodity prices. This index has fallen almost 20% since reaching a record high on July 6.
Commodity % Change from August 2003 % Change from 2008 Highpoint
Aluminium 88 -16
Copper 343 -9
Ferrochrome 357 0
Ferromanganese 448 -6
Gold 123 -18
Lead 286 -50
Maize 154 -21
Managanese Ore 779 0
Nickel 118 -60
Oil 280 -17
Palladium 54 -49
Platinum 95 -34
Rhodium 820 -61
Stainless Steel 171 -23
Uranium 476 -53
Vanadium 764 -8
Wheat 139 -25
Prices as at 22Aug Source: I-Net Bridge