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Commodities Briefing - Categorized | Investment, Market Moves, Price Watch more

Commodity prices may drop if investment cycle turns

Posted on 27 February 2013

A downturn in China’s investment cycle could push down global prices for some commodities, such as iron ore, by up to 12 percent, according to a new study by Standard & Poor’s Ratings Services.
The study, titled The Investment Overhang: If China’s Investments Dip, Commodity Prices May Slip, found a strong correlation between movements in China’s investment-to-GDP ratio and prices for commodities such as iron ore and coal. Under our downside scenario for China, prices for a range of commodities could decline by between 5 percent and 12 percent, averaging a fall of 9 percent, S&P said………………………………………..Full Article: Source


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