A metal indicates that the industrial crisis is among us, but it will not go away anytime soon
There is a metal that is widely used in different sectors and which is therefore often used as an indicator of the progress of production and industrial activities: copper.
Copper is present in electronics, mechanics, in various alloys (let's simply think of bronze), in pipes, in extremely varied products from cars, including electric ones, to trains, power lines, solar panels. This very wide industrial use makes it a very useful indicator of industrial activity: if the demand is large, prices rise while waiting for the offer to adapt.
The price of copper has literally plummeted in the past few weeks:
The fall in May was such that it brought it back to the value of August 2021, a sign that demand for the metal dropped precipitously in the face, evidently, of a declining industrial production activity.
It must be said that we are still far from the values of 2019, before covid, leaving out the parenthesis of the pandemic
Why the recent drop:
- high energy inflation reduces the purchasing capacity of individuals and companies, so that, beyond certain specific sectors, consumption and investments are falling;
- lockdown in China and breaking of the logistic chains connected with the East reduce the industrial production of many goods, and therefore the use of copper both in the producing country par excellence, China, and in those who perhaps use Chinese sub-components (we );
- however, the conflict has led to a contraction in the demand for semi-finished investment products in several countries
At the same time, the fact that prices have not yet normalized to values similar to those before covid, but are still higher, indicate that the current stagflationary push, that is the demand bubble, is not yet exhausted. So the cii has begun, but it has not yet fully felt its effect.
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The article A metal shows us that the industrial crisis is among us, but it will not go away soon comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/un-metallo-ci-indica-che-la-crisi-industriale-e-fra-noi-ma-non-se-ne-andra-presto/ on Thu, 12 May 2022 14:26:20 +0000.