Commodity price developments often go hand in hand with growth in emerging economies, which consume more energy as their wealth rises. The rout in emerging markets is starting to spill into commodities, with coal prices tumbling as much as 10 percent this month as utilities in developing economies slash orders. Prices of other commodities such as iron ore have also dropped as a result of lower demand, but this is more closely related to developments in China. The rise of China as a major economic power over the last 15 years also means the turmoil in emerging markets is seen as less of a problem than the East Asian crisis of the late 1990s. He added that even if Chinas growth slowed, its absolute economic output and commodities demand had risen so much since 1998 that a repeat of that crisis was unlikely.
Posted on: Fri, 31 Jan 2014 06:40:48 +0000
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