2000s commodities boom
Encyclopedia
The 2000s commodities boom is the rise in many physical commodity
prices (such as those of food stuffs, metals, chemicals, fuel
s and the like) which occurred during the decade of the 2000s (2000–2009), following the Great Commodities Depression of the 1980s and 1990s. The boom is largely due to the rising demand from emerging markets
such as the BRIC
countries and the former Yugoslavia
, as well as the result of concerns over long-term supply availability. There was a sharp down-turn in prices during 2008 and early 2009 as a result of the credit crunch and sovereign debt crisis
, but prices began to rise as demand recovered from late 2009 to mid 2010. Oil began to slip downwards after mid 2010, but peaked at $101.80 on January 30 and 31, 2011, as then Egypt
ian political crisis and rioting broke out, leading to concerns over both the safe use of the Suez Canal
and over all security in Arabia itself. On March 3, Libya's National Oil Corp said that output had halved due to the departure of foreign workers. As this happened, Brent Crude
surged to a new high of above $116.00 a barrel as supply disruptions and potential for more unrest in the Middle East and North Africa continued to worry investors. Prices were thus rising into the 2010s.
of a barrel
of crude oil on NYMEX
was generally under $25/barrel. Since 1968 the price of gold has ranged widely, from a high of $850/oz ($27,300/kg) on January 21, 1980, to a low of $252.90/oz ($8,131/kg) on June 21, 1999 (London Gold Fixing).
The analysis of this period is based on the work of Robert Solow
and is rooted in macroeconomic theories of trade including the Mundell-Fleming model
. One opinion stated that
Hence, in the case of an economic crisis commodities prices follow the trends in exchange rate (coupled) and its prices decrease in case there are downward trends of diminishing Money Supply.
Foreign exchange impacts commodities prices and so does money supply: the advent of a crisis will pull commodities prices down.
A commodity price bubble, known as the 2000s commodities boom, was created following the collapse in the mid 2000s housing bubble. Commodities were seen as a safe bet after the bubble economy surrounding housing
prices had gone from boom to bust in several western nations, including the UK, USA, Ireland, Greece
and Spain.
The renewed interest in coal by China's and Taiwan
's energy companies and the rise of alternative power sources like wind farms helped modify coal prices over the 2000s.
Chlorine price steadily increased throughout 2007 and early 2008 as demand for P.V.C.
and some metals like copper, Neodymium and Tantalum rose due to the increased growth of the BRIC
countries' demand for electrical goods. Russia
increased production, but the U.S.A. offset this with production cuts in the late 1990s and mid 2000s.
Phosphorus
, rhodium
, molybdenum
, manganese
, vanadium
and palladium
are used in high grade steels, oil based lubricants, automotive catalytic converters, chemical plants' catalysts, electronics, TV screens and in radio isotopes. Demand for these metals appeared to be increasing as computers, mobile phones and iPods became more popular in the mid to late 2000s. Thulium
is used in x-ray
tubes and Neodymium
is used in high strength/high grade magnets.
Molybdenum
, rhodium
, neodymium
and palladium
are relatively scarce metals, while manganese
and vanadium
are, like phosphorus
and sulfur
, fairly abundant for minor minerals. The major metals such as iron, lead and tin are commonplace.
Recycling of the aluminum, ferrous
metals, copper fractions, gold, palladium
and platinum
in mobile phones, computers and iPods had got under way by the mid 2000s. Battery recycling
has helped bring down both the nickel and cadmium
prices.
Sulfuric acid
(an important chemical commodity used in processes such as steel processing, copper production and bioethanol production) increased in price 3.5-fold in less than 1 year while producers of sodium hydroxide have declared force majeure
due to flooding, precipitating similarly steep price increases.
Both a rising global population and a sharp decline in food crop production in favour of a sharp rise in biofuel
crops helped cause a sharp rise in basic food stock prices. Ethiopia
also saw a drought
threaten its already frail farm lands in 2007. Cocoa was also affected by a bad crop in 2008, due to disease and unusually heavy rain in parts of West Africa.
Between 2006 and 2008 average world prices for rice rose by 217%, wheat by 136%, corn
by 125% and soybeans by 107%. Rising demand in both India
and Egypt
helped to ramp up demand for American
wheat during this hyper-bull market during August 2007. Discounted wheat sold at about £11–£15/t. August 2007, with non discounted wheat at slightly higher price. The November 2007 wheat futures market was trading at nearly £165/t, with November 2008 contracts at £128.50. The market became rather bearish, if not down right boorish as non-futures prices froze up and stagnated in December 2007. The price of wheat reached record highs after Kazakhstan
began to limit supplies being sold overseas in early 2008, but had slowed down by late 2008. Food riot
s hit Egypt on April 12, 2008, as national bread prices rose rapidly in March and April 2008.
In late April 2008 rice prices hit 24 cents (U.S.) per U.S. pound, more than doubling the price in just seven months. The price of wheat had risen from an already high £88 per tonne to £91 from January to March 2010, due to the bullish market and currency concerns. This led to food riots in places such as Haiti
, Indonesia, the Ivory Coast, Uzbekistan, Egypt and Ethiopia
. The market remains fairly bullish.
On July 31, leading economists predicted that food prices, especially wheat will rise in Chad
as Russia
end exports due to a domestic drought destroying their wheat and barley harvests. By August 3, wheat prices stood at $7.11 per bushel due to the Russian export ban.
The German price of €100/£49 per tonne was typical for the year 2003 and it steadily rose over the years. By the September of 2008 saw the American
price of $235 per ton, which had fallen to just $120 per ton, and in the January of 2009, the UK's fell six weeks from about £70.00 per ton, to only £10.00 per ton. The slump was probably due to the economic down turn in East Asia leading to market for waste paper drying up in China. 2010 averaged at $120.32 over the start of the year, but saw a rapid rise global prices in May 2010, with the June 2010 resting $217.11 per ton in the USA as China's paper market began to reopen.
's energy companies.
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During 2003, the price rose above $30, reached $60 by August 11, 2005, and peaked at $147.30 in July 2008. Commentators attributed the heavy price increases to many factors, including reports from the United States Department of Energy
and others showing a decline in petroleum reserves
worries over peak oil
, Middle East tension, and oil price speculation.
For a time, geo-political events and natural disasters indirectly related to the global oil market had strong short-term effects on oil prices, such as North Korean missile tests, the 2006 conflict between Israel and Lebanon, worries over Iranian nuclear plans in 2006, Hurricane Katrina
, and various other factors. By 2008, such pressures appeared to have an insignificant impact on oil prices given the onset of the global recession
. The recession
caused demand for energy to shrink in late 2008, with oil prices falling from the July 2008 high of $147 to a December 2008 low of $32. Oil prices stabilized by October 2009 and established a trading range between $60 and $80.
The price of oil nearly tripled from $50 to $147 from early 2007 to 2008, before plunging as the financial crisis began to take hold in late 2008. Experts debate the causes, which include the flow of money from housing and other investments into commodities to speculation and monetary policy or the increasing feeling of raw materials scarcity in a fast growing world economy and thus positions taken on those markets, such as Chinese increasing presence in Africa. An increase in oil prices tends to divert a larger share of consumer spending into gasoline, which creates downward pressure on economic growth in oil importing countries, as wealth flows to oil-producing states.
In January 2008, oil prices surpassed $100 a barrel for the first time, the first of many price milestones to be passed in the course of the year. In July 2008, oil peaked at $147.30 a barrel and a gallon of gasoline was more than $4 across most of the U.S.A. The high of 2008 may have been part of broader pattern of spiking instability in the price of oil over the preceding decade. This pattern of instability in oil price may be a product of peak oil. There is concern that if the economy was to improve, oil prices might return to pre-recession levels.
In testimony before the Senate Committee on Commerce, Science, and Transportation on June 3, 2008, former director of the CFTC Division of Trading & Markets (responsible for enforcement) Michael Greenberger specifically named the Atlanta-based IntercontinentalExchange
, founded by Goldman Sachs
, Morgan Stanley
and British Petroleum as playing a key role in the speculative run-up of oil futures prices traded off the regulated futures exchanges in London and New York.
The price of oil rose to $77 per barrel on June 24 as a cyclone
begins to form in the south western Caribbean
. The price for July 2010 was about $84–$90 per barrel of crude oil.
Oil prices ended the year at $101.80 falling to $100.01 per barrel on January 30 and 31, 2011. Then the Egypt
ian civil war broke out, as it theoretically put the use of Suez Canal at risk. Also a gas pipline
to Jordan
was blown up by sabotures in the Sinai Peninsular.
traded at about $15–$20/kg since the late 1980s due to a 10 year secular bear market, with a 2001 low of just over $10/kg. The Uranium bubble of 2007
started in 2005 and began to accelerate badly with the 2006 flooding of the Cigar Lake Mine
in Saskatchewan
. Uranium
prices peaked at roughly $300/kg in mid-2007, began to fall in mid 2008 and are now (end 2010) hovering about $100/kg. The stock prices of many uranium mining and exploration companies rose sharply, only to fall later in this boom.
There was also a brief resurgence of interest in nuclear power
by the UK government between 2006 and 2008 due to the apparently insecure nature of Middle Eastern oil and after the closure of several old and economically/environmentally unviable coal fired power stations at the time. This helped the uranium price to rally at this date.
. Prices were at or near an all time high in late 2010 due to people using the precious metals as a safe haven for their money as both the de facto value of cash and the stock market
prices became more erratic in the late 2000s.
The period from 1999 to 2001 marked the "Brown Bottom
" after a 20-year secular bear market at $252.90 per troy ounce. Prices increased rapidly from 1991, but the 1980 high was not exceeded until January 3, 2008 when a new maximum of $865.35 per troy ounce
was set (a.m. London Gold Fixing). Another record price was set on March 17, 2008 at $1,023.50/oz ($32,900/kg) (am. London Gold Fixing). In the fall of 2009, gold markets experience renewed momentum upwards due to increased demand and a weakening US dollar. On December 2, 2009, Gold passed the important barrier of US$1,200 per ounce to close at $1,215. Gold further rallied hitting new highs in May 2010 after the European Union debt crisis prompted further purchase of gold as a safe asset.
Since April 2001, the gold price has more than tripled in value against the US dollar, prompting speculation that the long secular bear market had ended and a bull market has returned. Gold's price finally stood at $1,350 per troy oz on July 1, 2010.
On 7 October 2010, it cost $1,364.60 per troy ounce, by December 7 reached the all time nominal historic high of $1,429.05 per troy ounce.
Note that the analysis of log-linear oscillations in the gold price dynamics for 2003–2010 conducted recently by Askar Akayev
's research group has allowed them to forecast the collapse in gold prices in May – July 2011. Note that the team has already forecasted correctly with a one-day accuracy the start of the collapse of the silver bubble.
Silver cost $4 per troy ounce in 1992, started to rise rapidly in early 2004, reached $18 per troy oz by late 2007, slipped badly to $10 per troy oz during the Credit Crunch
of 2008, but was selling in late 2009 and again in early 2010 at just under $18 per troy oz of metal. A year later, the Feb 2011 average was over $30 per oz of silver. On 29 April 2011, silver price reached $47.94 but fell by 12% on 2 May 2011.
first sold at about $350 per troy oz in 1992 and stayed rather flat save for a small dip to about $325 per troy oz in the mid 1990s and an equally small rise to about $375 per troy ounce in the Millennium period. It started to gain value in mid 2002 and grew on an experiential curve
model as the prices then began to move sharply upwards. The high point was when it was trading for $2,200 per troy oz in early 2007. Prices declined to $800 per troy oz in January 2008, but the price had increased $1,600 per troy oz by early 2010.
is among the most expensive industrial metals, with an average price exceeding US$6,000 per kilogram, as of mid 2009. It first traded in 1928 at US$10,000 per kilogram of metal, but traded at US$ 250 per Troy ounce in mid 2010. It traded in July, 2010, at about US$4,000–4,500/kg.
The price of aluminium was 80 US cents per lb in 1995 and 45 cents per lb in 1998 and hovered around this until the January 2003, when it started to rise to $1.50 per pound and in 2006 and $1.40 per lb in the December of 2007. It collapsed down to a mere 60 cents per lb in the November of 2008, but is now hovering at about $1.00 per lb, with a new April peak of $1.10 per pound of aluminium.
in May 2007 to about $11,550/£8,300 per metric ton in January 2009. Prices were only just starting to recover as of January 2010, but most of Australia's nickel mines had gone bankrupt by then. As the price for high grade nickel sulphate ore
recovered in 2010, so did the Australian mining industry. Battery recycling
has helped bring down both the nickel and cadmium prices.
It was also noticed that a copper price bubble was occurring at the same time as the oil bubble. Copper traded at about $2,500 per tonne
from 1990 until 1999, when it fell to about $1,600. The price slump lasted until 2004 which saw a price surge that had copper reaching $9,000 per tonne in the May of 2006, but it eventually fell down to $7,040 per tonne in early 2008. When the slump came, it hit some copper mining countries like the Democratic Republic of the Congo
(D.R.C.) very hard. Mining authorities announced on 10 December 2009, that the Dikulushi mine
, which is situated in the D.R.C.’s Katanga Province
, would close due to poor copper prices.
prices rose brief during the millennium
period due to increased demand, then collapsed to nearly their original 1995-7 starting price of $500/oz between 2002 and 2004.
Later on, the mysterious and unexpected Rhodium price bubble of 2008 suddenly increased prices from just over $500/oz in late 2006 to $9,000/oz-$9,500/oz in July 2008, only for the price then to tumble down only $1,000/oz in January 2009. Both an increase in demand in the American automotive industry, a herd instinct among investors, a then bullish market in rare metals and a rogue speculator or rogue speculators on Wall Street
were all at least partly to blame for the sudden rise and fall in the rare metal's price.
s in the automobile industry. It is also used for some medical, high grade steel, industrial, dental and electronic purposes.
Palladium
prices rose sharply during the millennium
period due to increased demand, then collapsed to nearly their original starting price by the end 2002, only to start to rise less dramatically in 2006 the year. Palladium
prices in 1992 and 2002–04 was about $200/oz. It rapidly shot up to approximately $1,000/oz between 1999–2001 and collapsed to only $200/oz by late 2002, but is now just under $500/oz per of Palladium in 2010.
In the run up to 2000, Russian supply of palladium to the global market was repeatedly delayed and disrupted because the export quota was not granted on time, for political reasons. The ensuing market panic drove the palladium price to an all-time high of $1,100 per troy ounce
in January 2001. Around this time, the Ford Motor Company
, fearing auto vehicle production disruption due to a possible palladium shortage, stockpiled large amounts of the metal purchased near the price high. When prices fell in early 2001, Ford lost nearly US$1 billion. World demand for palladium increased from 100 tons in 1990 to nearly 300 tons in 2000. The global production of palladium from mines was 222 metric tons in 2006 according to the USGS.
by September and collapsed back down to $1,200 per tonne in the October of that year. Despite the bullish market condition, the price had collapsed by the July of 2009 and was only worth about $1,400 per tonne of lead. The lead and zinc markets became rather bearish for several months afterwards. Prices were hovering at between $1,770 and $2,175 per tonne as the markets became more bullish and increased prices after China's car scrapping scheme had caused a general upturn in lead, zinc, cadmium and aluminium production. By the June of 2010, prices stood at only $870 per tonne, and were back to about $2,200 in the July of 2010.
rose sharply in early 2007 after a five-year secular bear market, then collapsed to nearly their original starting price by the end of the next year. Zinc also exhibited similar bullish trading patterns as most metals did since 2004, but with a different overall price.
Zinc sale prices were 80 cents per pound in July 2008, which was typical of its 2004–2008 pricing levels. By January 2009 it had bottomed out and was worth 45 cents per lb. A spectacular bull market and increased Chinese interest in galvanised construction steel caused prices to top off at $1.20 per pound of metal by January 2010. It then quickly fell back to a routine 80 cents by July 2010.
Zinc is popular in manufacturing and building; its ability to create corrosion
-resistant zinc plating
of steel (hot-dip galvanizing
) is the major application for zinc. Other applications are in batteries and alloys, such as brass. A variety of zinc compounds are commonly used, such as zinc carbonate and zinc gluconate
(as dietary supplements), zinc chloride
(in deodorants), zinc pyrithione
(anti-dandruff
shampoos), zinc sulfide (in luminescent paints), and zinc methyl or zinc diethyl in the organic laboratory.
, a fairly rare metal which is used in high grade magnets, saw its prices rise due to increased demand, as were typical of this general market trend. The average price was $16.10 per kg in November and December 2009, but it began trading in June 2010 at $20–$45 per kg.
Neodymium serves as a constituent of high strength neodymium magnets, which are widely used in loudspeakers, computer hard drives, high power-per-weight electric motor
s (e.g. for those in hybrid cars) and in high efficiency generators (such as aircraft and wind turbine
generators).
There was also a strong resurgence of interest in wind farms by the UK government between 2008 and 2010 due to the continuing fears of insecurity in Middle Eastern oil supplies to the industrialised nations and after the closure of several old and economically/environmentally unviable coal-fuelled power stations earlier that decade. This helped the price to rally in 2010.
, tantalium, manganese
, thulium
, iron, tin
, chromium, indium
, columbium/niobium
, cobalt
, molybdenum
and vanadium
prices rose sharply in early 2007, then collapsed to nearly their original starting price by the end of the next year
due to uncertainty about supplies matching the demand, especially those of the BRIC
countries' electronics
industries.
Niobium is used in the steel of gas pipe lines
due to the alloy
's high strength and low corrosion
rate.
Battery recycling has helped bring down both the nickel and cadmium
prices. About 86% of all cadmium production was used in batteries during 2009. The rapid growth of wind farm
s and heavy duty magnets has made neodymium prices rally again and both Brazil
and China's renewed interest in high grade steel has improved the Vanadium price recently. The way these metal's prices rose and fell due to increased demand, were typical of this general market trend.
In 2002, 95% pure Sulphuric acid cost £55 and 90% acid cost £40 per tonne. Due to floods in Poland
and increased demand in China, the acid’s price soared to $329/tonne in May 2008, from just $90/tonne in October 2007. It has become steadily cheaper since the start of 2010.
Most industrial chemicals exhibited similar price trends due to bad weather in the EU and USA along with increased demand by the BRIC
nations.
plastics, caustic soda, industrial paper bleach and ordinary household and industrial bleach
s saw their prices rise sharply in 2008 as a result of volatility on the world's chlorine
market.
As a result of fight of supply and high operating rates in May 1997, two chlorine producers took the bold initiative of calling for an average price rice of $25 per short ton. Other producers were considering bringing the total price increase for the 1997 product year to date of up to $80 per short and fob ton, from $45–$50 per short and fob ton in May 1996. This occurred as both rapidly ascending demand from the vinyl polymer
chain market and the unusually strong seasonal demand and no new production capacity on the immediate horizon coincided. The price increase had its firm foundations in the incumbent bullish market dynamics of the mid 2000s. Occidental Chemical Corporation suggested a minor rise as other firms took a "wait-and-see approach" and Russia
raised production slightly to ease the cost of domestic bleach and swimming pool chloro-tablet costs.
Chlorine prices rose in May 2005 as both growing energy costs, shrinking supply and high market tariffs
in the EU, NAFTA and Latin America, the increased use of chlorine-based chemicals for the aquatics industry. The price of chlorine caustic was $350 per dry short ton
, up from $100 last March. Chlorine was priced at $330 per dry short ton, up $130 on 2008's price of $200.
The gas's price steadily increased throughout 2007 and early 2008 as demand for P.V.C.
and some metals like copper, Neodymium and Tantalum rose due to the increased growth of the BRIC
countries demand for electrical goods.
America
’s chlorine prices rose suddenly from about $125–$150 per ton fob between June and August 2009 months on a sharp rise in chlor-alkali production and capacity cuts after a year in which production quotes largely stay flat. The spot price surged more than 300% to about $475–$525 ton fob in August 2009. Both Russia
and the European Union were also increasing chlorine production to stabilise world prices.
Non discounted American chlorine
was priced at $390–410 short ton and discounted prices stood at $300 per short ton
between November 2009 and February 2010. As the European chlorine production spiked in November to a daily output of 26,971 tonnes, before falling to 23,667 short ton in December due to the Christmas and New Year holidays. Production was about European production was 25.8% higher than December 2008 levels.
, Zambia, Zimbabwe
, China and Australia. The $900,000,000 Tenke Fungurume copper-cobalt mining project in the Democratic Republic of Congo was cleared on February 2008 for building to start in a years time and then Luanshya Copper Mine in Zambia
closed on 6 March 2009. Zimbabwe
and Australia also saw nickel and copper mines open close during this time. China has opened several new coal mines in Qinghai
province during the years 2007 and 2008.
in July 2008.
In February 2008, analyst Gary Dorsch wrote:
Economist James D. Hamilton
has argued that the increase in oil prices in the period of 2007 to 2008 was a significant cause of the recession. He evaluated several different approaches to estimating the impact of oil price shocks on the economy, including some methods that had previously shown a decline in the relationship between oil price shocks and the overall economy. All of these methods "support a common conclusion; had there been no increase in oil prices between 2007:Q3 and 2008:Q2, the US economy would not have been in a recession over the period 2007:Q4 through 2008:Q3." Hamilton's own model, a time-series econometric forecast based on data up to 2003, showed that the decline in GDP could have been successfully predicted to almost its full extent given knowledge of the price of oil. The results imply that oil prices were entirely responsible for the recession; however, Hamilton himself acknowledged that this was probably not the case but maintained that it showed that oil price increases made a significant contribution to the downturn in economic growth.
Commodity
In economics, a commodity is the generic term for any marketable item produced to satisfy wants or needs. Economic commodities comprise goods and services....
prices (such as those of food stuffs, metals, chemicals, fuel
Fuel
Fuel is any material that stores energy that can later be extracted to perform mechanical work in a controlled manner. Most fuels used by humans undergo combustion, a redox reaction in which a combustible substance releases energy after it ignites and reacts with the oxygen in the air...
s and the like) which occurred during the decade of the 2000s (2000–2009), following the Great Commodities Depression of the 1980s and 1990s. The boom is largely due to the rising demand from emerging markets
Emerging markets
Emerging markets are nations with social or business activity in the process of rapid growth and industrialization. Based on data from 2006, there are around 28 emerging markets in the world . The economies of China and India are considered to be the largest...
such as the BRIC
BRIC
In economics, BRIC is a grouping acronym that refers to the countries of Brazil, Russia, India and China, which are all deemed to be at a similar stage of newly advanced economic development...
countries and the former Yugoslavia
Former Yugoslavia
The former Yugoslavia is a term used to describe the present day states which succeeded the collapse of the Socialist Federal Republic of Yugoslavia....
, as well as the result of concerns over long-term supply availability. There was a sharp down-turn in prices during 2008 and early 2009 as a result of the credit crunch and sovereign debt crisis
2010 European sovereign debt crisis
From late 2009, fears of a sovereign debt crisis developed among investors concerning some European states, intensifying in early 2010 and thereafter.....
, but prices began to rise as demand recovered from late 2009 to mid 2010. Oil began to slip downwards after mid 2010, but peaked at $101.80 on January 30 and 31, 2011, as then Egypt
Egypt
Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...
ian political crisis and rioting broke out, leading to concerns over both the safe use of the Suez Canal
Suez Canal
The Suez Canal , also known by the nickname "The Highway to India", is an artificial sea-level waterway in Egypt, connecting the Mediterranean Sea and the Red Sea. Opened in November 1869 after 10 years of construction work, it allows water transportation between Europe and Asia without navigation...
and over all security in Arabia itself. On March 3, Libya's National Oil Corp said that output had halved due to the departure of foreign workers. As this happened, Brent Crude
Brent Crude
Brent Crude is the biggest of the many major classifications of crude oil consisting of Brent Crude, Brent Sweet Light Crude, Oseberg, Ekofisk, and Forties . Brent Crude is sourced from the North Sea. The Brent Crude oil marker is also known as Brent Blend, London Brent and Brent petroleum...
surged to a new high of above $116.00 a barrel as supply disruptions and potential for more unrest in the Middle East and North Africa continued to worry investors. Prices were thus rising into the 2010s.
Background of depressed prices
The prices of raw materials were depressed and declining from, roughly, 1982 until 1998. From the mid-1980s to September 2003, the inflation-adjusted priceInflation adjustment
Inflation adjustment is the process of adjusting economic indicators and the prices of goods and services from different time periods to the same price level. To adjust for inflation, an indicator is divided by the inflation index...
of a barrel
Barrel (unit)
A barrel is one of several units of volume, with dry barrels, fluid barrels , oil barrel, etc...
of crude oil on NYMEX
New York Mercantile Exchange
The New York Mercantile Exchange is the world's largest physical commodity futures exchange. It is located at One North End Avenue in the World Financial Center in the Battery Park City section of Manhattan, New York City...
was generally under $25/barrel. Since 1968 the price of gold has ranged widely, from a high of $850/oz ($27,300/kg) on January 21, 1980, to a low of $252.90/oz ($8,131/kg) on June 21, 1999 (London Gold Fixing).
The analysis of this period is based on the work of Robert Solow
Robert Solow
Robert Merton Solow is an American economist particularly known for his work on the theory of economic growth that culminated in the exogenous growth model named after him...
and is rooted in macroeconomic theories of trade including the Mundell-Fleming model
Mundell-Fleming model
The Mundell–Fleming model, also known as the IS-LM-BP model, is an economic model first set forth by Robert Mundell and Marcus Fleming. The model is an extension of the IS-LM model...
. One opinion stated that
“The volatility and interest rates found its way into commodity inputs and all sectors of the world economy."
Hence, in the case of an economic crisis commodities prices follow the trends in exchange rate (coupled) and its prices decrease in case there are downward trends of diminishing Money Supply.
Foreign exchange impacts commodities prices and so does money supply: the advent of a crisis will pull commodities prices down.
Boom
House
A house is a building or structure that has the ability to be occupied for dwelling by human beings or other creatures. The term house includes many kinds of different dwellings ranging from rudimentary huts of nomadic tribes to free standing individual structures...
prices had gone from boom to bust in several western nations, including the UK, USA, Ireland, Greece
Greece
Greece , officially the Hellenic Republic , and historically Hellas or the Republic of Greece in English, is a country in southeastern Europe....
and Spain.
The renewed interest in coal by China's and Taiwan
Taiwan
Taiwan , also known, especially in the past, as Formosa , is the largest island of the same-named island group of East Asia in the western Pacific Ocean and located off the southeastern coast of mainland China. The island forms over 99% of the current territory of the Republic of China following...
's energy companies and the rise of alternative power sources like wind farms helped modify coal prices over the 2000s.
Chlorine price steadily increased throughout 2007 and early 2008 as demand for P.V.C.
PVC
Polyvinyl chloride is a plastic.PVC may also refer to:*Param Vir Chakra, India's highest military honor*Peripheral venous catheter, a small, flexible tube placed into a peripheral vein in order to administer medication or fluids...
and some metals like copper, Neodymium and Tantalum rose due to the increased growth of the BRIC
BRIC
In economics, BRIC is a grouping acronym that refers to the countries of Brazil, Russia, India and China, which are all deemed to be at a similar stage of newly advanced economic development...
countries' demand for electrical goods. Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
increased production, but the U.S.A. offset this with production cuts in the late 1990s and mid 2000s.
Phosphorus
Phosphorus
Phosphorus is the chemical element that has the symbol P and atomic number 15. A multivalent nonmetal of the nitrogen group, phosphorus as a mineral is almost always present in its maximally oxidized state, as inorganic phosphate rocks...
, rhodium
Rhodium
Rhodium is a chemical element that is a rare, silvery-white, hard and chemically inert transition metal and a member of the platinum group. It has the chemical symbol Rh and atomic number 45. It is composed of only one isotope, 103Rh. Naturally occurring rhodium is found as the free metal, alloyed...
, molybdenum
Molybdenum
Molybdenum , is a Group 6 chemical element with the symbol Mo and atomic number 42. The name is from Neo-Latin Molybdaenum, from Ancient Greek , meaning lead, itself proposed as a loanword from Anatolian Luvian and Lydian languages, since its ores were confused with lead ores...
, manganese
Manganese
Manganese is a chemical element, designated by the symbol Mn. It has the atomic number 25. It is found as a free element in nature , and in many minerals...
, vanadium
Vanadium
Vanadium is a chemical element with the symbol V and atomic number 23. It is a hard, silvery gray, ductile and malleable transition metal. The formation of an oxide layer stabilizes the metal against oxidation. The element is found only in chemically combined form in nature...
and palladium
Palladium
Palladium is a chemical element with the chemical symbol Pd and an atomic number of 46. It is a rare and lustrous silvery-white metal discovered in 1803 by William Hyde Wollaston. He named it after the asteroid Pallas, which was itself named after the epithet of the Greek goddess Athena, acquired...
are used in high grade steels, oil based lubricants, automotive catalytic converters, chemical plants' catalysts, electronics, TV screens and in radio isotopes. Demand for these metals appeared to be increasing as computers, mobile phones and iPods became more popular in the mid to late 2000s. Thulium
Thulium
Thulium is a chemical element that has the symbol Tm and atomic number 69. Thulium is the second least abundant of the lanthanides . It is an easily workable metal with a bright silvery-gray luster...
is used in x-ray
X-ray
X-radiation is a form of electromagnetic radiation. X-rays have a wavelength in the range of 0.01 to 10 nanometers, corresponding to frequencies in the range 30 petahertz to 30 exahertz and energies in the range 120 eV to 120 keV. They are shorter in wavelength than UV rays and longer than gamma...
tubes and Neodymium
Neodymium
Neodymium is a chemical element with the symbol Nd and atomic number 60. It is a soft silvery metal that tarnishes in air. Neodymium was discovered in 1885 by the Austrian chemist Carl Auer von Welsbach. It is present in significant quantities in the ore minerals monazite and bastnäsite...
is used in high strength/high grade magnets.
Molybdenum
Molybdenum
Molybdenum , is a Group 6 chemical element with the symbol Mo and atomic number 42. The name is from Neo-Latin Molybdaenum, from Ancient Greek , meaning lead, itself proposed as a loanword from Anatolian Luvian and Lydian languages, since its ores were confused with lead ores...
, rhodium
Rhodium
Rhodium is a chemical element that is a rare, silvery-white, hard and chemically inert transition metal and a member of the platinum group. It has the chemical symbol Rh and atomic number 45. It is composed of only one isotope, 103Rh. Naturally occurring rhodium is found as the free metal, alloyed...
, neodymium
Neodymium
Neodymium is a chemical element with the symbol Nd and atomic number 60. It is a soft silvery metal that tarnishes in air. Neodymium was discovered in 1885 by the Austrian chemist Carl Auer von Welsbach. It is present in significant quantities in the ore minerals monazite and bastnäsite...
and palladium
Palladium
Palladium is a chemical element with the chemical symbol Pd and an atomic number of 46. It is a rare and lustrous silvery-white metal discovered in 1803 by William Hyde Wollaston. He named it after the asteroid Pallas, which was itself named after the epithet of the Greek goddess Athena, acquired...
are relatively scarce metals, while manganese
Manganese
Manganese is a chemical element, designated by the symbol Mn. It has the atomic number 25. It is found as a free element in nature , and in many minerals...
and vanadium
Vanadium
Vanadium is a chemical element with the symbol V and atomic number 23. It is a hard, silvery gray, ductile and malleable transition metal. The formation of an oxide layer stabilizes the metal against oxidation. The element is found only in chemically combined form in nature...
are, like phosphorus
Phosphorus
Phosphorus is the chemical element that has the symbol P and atomic number 15. A multivalent nonmetal of the nitrogen group, phosphorus as a mineral is almost always present in its maximally oxidized state, as inorganic phosphate rocks...
and sulfur
Sulfur
Sulfur or sulphur is the chemical element with atomic number 16. In the periodic table it is represented by the symbol S. It is an abundant, multivalent non-metal. Under normal conditions, sulfur atoms form cyclic octatomic molecules with chemical formula S8. Elemental sulfur is a bright yellow...
, fairly abundant for minor minerals. The major metals such as iron, lead and tin are commonplace.
Recycling of the aluminum, ferrous
Ferrous
Ferrous , in chemistry, indicates a divalent iron compound , as opposed to ferric, which indicates a trivalent iron compound ....
metals, copper fractions, gold, palladium
Palladium
Palladium is a chemical element with the chemical symbol Pd and an atomic number of 46. It is a rare and lustrous silvery-white metal discovered in 1803 by William Hyde Wollaston. He named it after the asteroid Pallas, which was itself named after the epithet of the Greek goddess Athena, acquired...
and platinum
Platinum
Platinum is a chemical element with the chemical symbol Pt and an atomic number of 78. Its name is derived from the Spanish term platina del Pinto, which is literally translated into "little silver of the Pinto River." It is a dense, malleable, ductile, precious, gray-white transition metal...
in mobile phones, computers and iPods had got under way by the mid 2000s. Battery recycling
Battery recycling
Battery recycling is a recycling activity that aims to reduce the number of batteries being disposed as municipal solid waste. Batteries contain a number of heavy metals and toxic chemicals, their dumping has raised concern over risks of soil contamination and water pollution.-Battery recycling by...
has helped bring down both the nickel and cadmium
Cadmium
Cadmium is a chemical element with the symbol Cd and atomic number 48. This soft, bluish-white metal is chemically similar to the two other stable metals in group 12, zinc and mercury. Similar to zinc, it prefers oxidation state +2 in most of its compounds and similar to mercury it shows a low...
prices.
Sulfuric acid
Sulfuric acid
Sulfuric acid is a strong mineral acid with the molecular formula . Its historical name is oil of vitriol. Pure sulfuric acid is a highly corrosive, colorless, viscous liquid. The salts of sulfuric acid are called sulfates...
(an important chemical commodity used in processes such as steel processing, copper production and bioethanol production) increased in price 3.5-fold in less than 1 year while producers of sodium hydroxide have declared force majeure
Force majeure
Force majeure or vis major "superior force", also known as cas fortuit or casus fortuitus "chance occurrence, unavoidable accident", is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of...
due to flooding, precipitating similarly steep price increases.
Corn, wheat, rice, cocoa and Soya beans
Biofuel
Biofuel is a type of fuel whose energy is derived from biological carbon fixation. Biofuels include fuels derived from biomass conversion, as well as solid biomass, liquid fuels and various biogases...
crops helped cause a sharp rise in basic food stock prices. Ethiopia
Ethiopia
Ethiopia , officially known as the Federal Democratic Republic of Ethiopia, is a country located in the Horn of Africa. It is the second-most populous nation in Africa, with over 82 million inhabitants, and the tenth-largest by area, occupying 1,100,000 km2...
also saw a drought
Drought
A drought is an extended period of months or years when a region notes a deficiency in its water supply. Generally, this occurs when a region receives consistently below average precipitation. It can have a substantial impact on the ecosystem and agriculture of the affected region...
threaten its already frail farm lands in 2007. Cocoa was also affected by a bad crop in 2008, due to disease and unusually heavy rain in parts of West Africa.
Between 2006 and 2008 average world prices for rice rose by 217%, wheat by 136%, corn
Maize
Maize known in many English-speaking countries as corn or mielie/mealie, is a grain domesticated by indigenous peoples in Mesoamerica in prehistoric times. The leafy stalk produces ears which contain seeds called kernels. Though technically a grain, maize kernels are used in cooking as a vegetable...
by 125% and soybeans by 107%. Rising demand in both India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
and Egypt
Egypt
Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...
helped to ramp up demand for American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
wheat during this hyper-bull market during August 2007. Discounted wheat sold at about £11–£15/t. August 2007, with non discounted wheat at slightly higher price. The November 2007 wheat futures market was trading at nearly £165/t, with November 2008 contracts at £128.50. The market became rather bearish, if not down right boorish as non-futures prices froze up and stagnated in December 2007. The price of wheat reached record highs after Kazakhstan
Kazakhstan
Kazakhstan , officially the Republic of Kazakhstan, is a transcontinental country in Central Asia and Eastern Europe. Ranked as the ninth largest country in the world, it is also the world's largest landlocked country; its territory of is greater than Western Europe...
began to limit supplies being sold overseas in early 2008, but had slowed down by late 2008. Food riot
Food riot
Food and bread riots are caused by harvest failures, incompetent food storage, hoarding, poisoning of food, or attacks by pests like locusts. When the public becomes too desperate in such conditions, they attack shops, farms, homes, or government buildings to attain bread or other staple foods like...
s hit Egypt on April 12, 2008, as national bread prices rose rapidly in March and April 2008.
In late April 2008 rice prices hit 24 cents (U.S.) per U.S. pound, more than doubling the price in just seven months. The price of wheat had risen from an already high £88 per tonne to £91 from January to March 2010, due to the bullish market and currency concerns. This led to food riots in places such as Haiti
Haiti
Haiti , officially the Republic of Haiti , is a Caribbean country. It occupies the western, smaller portion of the island of Hispaniola, in the Greater Antillean archipelago, which it shares with the Dominican Republic. Ayiti was the indigenous Taíno or Amerindian name for the island...
, Indonesia, the Ivory Coast, Uzbekistan, Egypt and Ethiopia
Ethiopia
Ethiopia , officially known as the Federal Democratic Republic of Ethiopia, is a country located in the Horn of Africa. It is the second-most populous nation in Africa, with over 82 million inhabitants, and the tenth-largest by area, occupying 1,100,000 km2...
. The market remains fairly bullish.
On July 31, leading economists predicted that food prices, especially wheat will rise in Chad
Chad
Chad , officially known as the Republic of Chad, is a landlocked country in Central Africa. It is bordered by Libya to the north, Sudan to the east, the Central African Republic to the south, Cameroon and Nigeria to the southwest, and Niger to the west...
as Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
end exports due to a domestic drought destroying their wheat and barley harvests. By August 3, wheat prices stood at $7.11 per bushel due to the Russian export ban.
Recycled paper
The price of recycled paper has varied greatly over the last 30 or so years.The German price of €100/£49 per tonne was typical for the year 2003 and it steadily rose over the years. By the September of 2008 saw the American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
price of $235 per ton, which had fallen to just $120 per ton, and in the January of 2009, the UK's fell six weeks from about £70.00 per ton, to only £10.00 per ton. The slump was probably due to the economic down turn in East Asia leading to market for waste paper drying up in China. 2010 averaged at $120.32 over the start of the year, but saw a rapid rise global prices in May 2010, with the June 2010 resting $217.11 per ton in the USA as China's paper market began to reopen.
Coal
Coal prices rose to AU$73 per tonne in September and then up to AU$84 per tonne in the October of 2009 due to renewed interest by China's and TaiwanTaiwan
Taiwan , also known, especially in the past, as Formosa , is the largest island of the same-named island group of East Asia in the western Pacific Ocean and located off the southeastern coast of mainland China. The island forms over 99% of the current territory of the Republic of China following...
's energy companies.
Oil
United States Department of Energy
The United States Department of Energy is a Cabinet-level department of the United States government concerned with the United States' policies regarding energy and safety in handling nuclear material...
and others showing a decline in petroleum reserves
Oil reserves
The total estimated amount of oil in an oil reservoir, including both producible and non-producible oil, is called oil in place. However, because of reservoir characteristics and limitations in petroleum extraction technologies, only a fraction of this oil can be brought to the surface, and it is...
worries over peak oil
Peak oil
Peak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. This concept is based on the observed production rates of individual oil wells, projected reserves and the combined production rate of a field...
, Middle East tension, and oil price speculation.
For a time, geo-political events and natural disasters indirectly related to the global oil market had strong short-term effects on oil prices, such as North Korean missile tests, the 2006 conflict between Israel and Lebanon, worries over Iranian nuclear plans in 2006, Hurricane Katrina
Hurricane Katrina
Hurricane Katrina of the 2005 Atlantic hurricane season was a powerful Atlantic hurricane. It is the costliest natural disaster, as well as one of the five deadliest hurricanes, in the history of the United States. Among recorded Atlantic hurricanes, it was the sixth strongest overall...
, and various other factors. By 2008, such pressures appeared to have an insignificant impact on oil prices given the onset of the global recession
Late 2000s recession
The late-2000s recession, sometimes referred to as the Great Recession or Lesser Depression or Long Recession, is a severe ongoing global economic problem that began in December 2007 and took a particularly sharp downward turn in September 2008. The Great Recession has affected the entire world...
. The recession
Late 2000s recession
The late-2000s recession, sometimes referred to as the Great Recession or Lesser Depression or Long Recession, is a severe ongoing global economic problem that began in December 2007 and took a particularly sharp downward turn in September 2008. The Great Recession has affected the entire world...
caused demand for energy to shrink in late 2008, with oil prices falling from the July 2008 high of $147 to a December 2008 low of $32. Oil prices stabilized by October 2009 and established a trading range between $60 and $80.
The price of oil nearly tripled from $50 to $147 from early 2007 to 2008, before plunging as the financial crisis began to take hold in late 2008. Experts debate the causes, which include the flow of money from housing and other investments into commodities to speculation and monetary policy or the increasing feeling of raw materials scarcity in a fast growing world economy and thus positions taken on those markets, such as Chinese increasing presence in Africa. An increase in oil prices tends to divert a larger share of consumer spending into gasoline, which creates downward pressure on economic growth in oil importing countries, as wealth flows to oil-producing states.
In January 2008, oil prices surpassed $100 a barrel for the first time, the first of many price milestones to be passed in the course of the year. In July 2008, oil peaked at $147.30 a barrel and a gallon of gasoline was more than $4 across most of the U.S.A. The high of 2008 may have been part of broader pattern of spiking instability in the price of oil over the preceding decade. This pattern of instability in oil price may be a product of peak oil. There is concern that if the economy was to improve, oil prices might return to pre-recession levels.
In testimony before the Senate Committee on Commerce, Science, and Transportation on June 3, 2008, former director of the CFTC Division of Trading & Markets (responsible for enforcement) Michael Greenberger specifically named the Atlanta-based IntercontinentalExchange
IntercontinentalExchange
IntercontinentalExchange, Inc., known as ICE, is an American financial company that operates Internet-based marketplaces which trade futures and over-the-counter energy and commodity contracts as well as derivative financial products...
, founded by Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
, Morgan Stanley
Morgan Stanley
Morgan Stanley is a global financial services firm headquartered in New York City serving a diversified group of corporations, governments, financial institutions, and individuals. Morgan Stanley also operates in 36 countries around the world, with over 600 offices and a workforce of over 60,000....
and British Petroleum as playing a key role in the speculative run-up of oil futures prices traded off the regulated futures exchanges in London and New York.
The price of oil rose to $77 per barrel on June 24 as a cyclone
Cyclone
In meteorology, a cyclone is an area of closed, circular fluid motion rotating in the same direction as the Earth. This is usually characterized by inward spiraling winds that rotate anticlockwise in the Northern Hemisphere and clockwise in the Southern Hemisphere of the Earth. Most large-scale...
begins to form in the south western Caribbean
Caribbean
The Caribbean is a crescent-shaped group of islands more than 2,000 miles long separating the Gulf of Mexico and the Caribbean Sea, to the west and south, from the Atlantic Ocean, to the east and north...
. The price for July 2010 was about $84–$90 per barrel of crude oil.
Oil prices ended the year at $101.80 falling to $100.01 per barrel on January 30 and 31, 2011. Then the Egypt
Egypt
Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...
ian civil war broke out, as it theoretically put the use of Suez Canal at risk. Also a gas pipline
Pipeline transport
Pipeline transport is the transportation of goods through a pipe. Most commonly, liquids and gases are sent, but pneumatic tubes that transport solid capsules using compressed air are also used....
to Jordan
Jordan
Jordan , officially the Hashemite Kingdom of Jordan , Al-Mamlaka al-Urduniyya al-Hashemiyya) is a kingdom on the East Bank of the River Jordan. The country borders Saudi Arabia to the east and south-east, Iraq to the north-east, Syria to the north and the West Bank and Israel to the west, sharing...
was blown up by sabotures in the Sinai Peninsular.
Uranium
UraniumUranium
Uranium is a silvery-white metallic chemical element in the actinide series of the periodic table, with atomic number 92. It is assigned the chemical symbol U. A uranium atom has 92 protons and 92 electrons, of which 6 are valence electrons...
traded at about $15–$20/kg since the late 1980s due to a 10 year secular bear market, with a 2001 low of just over $10/kg. The Uranium bubble of 2007
Uranium bubble of 2007
The uranium bubble of 2007 was a period of nearly exponential growth in the price of natural uranium, starting in 2005 and peaking at roughly 300$/kg in mid-2007. This coincided with significant rises of stock price of uranium mining and exploration companies...
started in 2005 and began to accelerate badly with the 2006 flooding of the Cigar Lake Mine
Cigar Lake Mine
The Cigar Lake Mine is the largest undeveloped high grade uranium deposit in the world, located in the uranium rich Athabasca Basin of northern Saskatchewan, Canada....
in Saskatchewan
Saskatchewan
Saskatchewan is a prairie province in Canada, which has an area of . Saskatchewan is bordered on the west by Alberta, on the north by the Northwest Territories, on the east by Manitoba, and on the south by the U.S. states of Montana and North Dakota....
. Uranium
Uranium
Uranium is a silvery-white metallic chemical element in the actinide series of the periodic table, with atomic number 92. It is assigned the chemical symbol U. A uranium atom has 92 protons and 92 electrons, of which 6 are valence electrons...
prices peaked at roughly $300/kg in mid-2007, began to fall in mid 2008 and are now (end 2010) hovering about $100/kg. The stock prices of many uranium mining and exploration companies rose sharply, only to fall later in this boom.
There was also a brief resurgence of interest in nuclear power
Nuclear power
Nuclear power is the use of sustained nuclear fission to generate heat and electricity. Nuclear power plants provide about 6% of the world's energy and 13–14% of the world's electricity, with the U.S., France, and Japan together accounting for about 50% of nuclear generated electricity...
by the UK government between 2006 and 2008 due to the apparently insecure nature of Middle Eastern oil and after the closure of several old and economically/environmentally unviable coal fired power stations at the time. This helped the uranium price to rally at this date.
Gold
There was a sharp shift in the prices of gold and, to a lesser extent, both silver and platinumPlatinum
Platinum is a chemical element with the chemical symbol Pt and an atomic number of 78. Its name is derived from the Spanish term platina del Pinto, which is literally translated into "little silver of the Pinto River." It is a dense, malleable, ductile, precious, gray-white transition metal...
. Prices were at or near an all time high in late 2010 due to people using the precious metals as a safe haven for their money as both the de facto value of cash and the stock market
Stock market
A stock market or equity market is a public entity for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.The size of the world stock market was estimated at about $36.6 trillion...
prices became more erratic in the late 2000s.
The period from 1999 to 2001 marked the "Brown Bottom
Brown Bottom
The sale of UK gold reserves was a policy pursued by HM Treasury over the period between 1999 and 2002, when gold prices were at their lowest in 20 years, following an extended bear market...
" after a 20-year secular bear market at $252.90 per troy ounce. Prices increased rapidly from 1991, but the 1980 high was not exceeded until January 3, 2008 when a new maximum of $865.35 per troy ounce
Troy weight
Troy weight is a system of units of mass customarily used for precious metals, gemstones, and black powder.There are 12 troy ounces per troy pound, rather than the 16 ounces per pound found in the more common avoirdupois system. The troy ounce is 480 grains, compared with the avoirdupois ounce,...
was set (a.m. London Gold Fixing). Another record price was set on March 17, 2008 at $1,023.50/oz ($32,900/kg) (am. London Gold Fixing). In the fall of 2009, gold markets experience renewed momentum upwards due to increased demand and a weakening US dollar. On December 2, 2009, Gold passed the important barrier of US$1,200 per ounce to close at $1,215. Gold further rallied hitting new highs in May 2010 after the European Union debt crisis prompted further purchase of gold as a safe asset.
Since April 2001, the gold price has more than tripled in value against the US dollar, prompting speculation that the long secular bear market had ended and a bull market has returned. Gold's price finally stood at $1,350 per troy oz on July 1, 2010.
On 7 October 2010, it cost $1,364.60 per troy ounce, by December 7 reached the all time nominal historic high of $1,429.05 per troy ounce.
Note that the analysis of log-linear oscillations in the gold price dynamics for 2003–2010 conducted recently by Askar Akayev
Askar Akayev
Askar Akayevich Akayev served as the President of Kyrgyzstan from 1990 until his overthrow in the March 2005 Tulip Revolution....
's research group has allowed them to forecast the collapse in gold prices in May – July 2011. Note that the team has already forecasted correctly with a one-day accuracy the start of the collapse of the silver bubble.
Silver
Credit crunch
A credit crunch is a reduction in the general availability of loans or a sudden tightening of the conditions required to obtain a loan from the banks. A credit crunch generally involves a reduction in the availability of credit independent of a rise in official interest rates...
of 2008, but was selling in late 2009 and again in early 2010 at just under $18 per troy oz of metal. A year later, the Feb 2011 average was over $30 per oz of silver. On 29 April 2011, silver price reached $47.94 but fell by 12% on 2 May 2011.
Platinum
PlatinumPlatinum
Platinum is a chemical element with the chemical symbol Pt and an atomic number of 78. Its name is derived from the Spanish term platina del Pinto, which is literally translated into "little silver of the Pinto River." It is a dense, malleable, ductile, precious, gray-white transition metal...
first sold at about $350 per troy oz in 1992 and stayed rather flat save for a small dip to about $325 per troy oz in the mid 1990s and an equally small rise to about $375 per troy ounce in the Millennium period. It started to gain value in mid 2002 and grew on an experiential curve
Experience curve effects
Models of the learning curve effect and the closely related experience curve effect express the relationship between equations for experience and efficiency or between efficiency gains and investment in the effort....
model as the prices then began to move sharply upwards. The high point was when it was trading for $2,200 per troy oz in early 2007. Prices declined to $800 per troy oz in January 2008, but the price had increased $1,600 per troy oz by early 2010.
Rhenium
Because of the low availability relative to demand, rheniumRhenium
Rhenium is a chemical element with the symbol Re and atomic number 75. It is a silvery-white, heavy, third-row transition metal in group 7 of the periodic table. With an average concentration of 1 part per billion , rhenium is one of the rarest elements in the Earth's crust. The free element has...
is among the most expensive industrial metals, with an average price exceeding US$6,000 per kilogram, as of mid 2009. It first traded in 1928 at US$10,000 per kilogram of metal, but traded at US$ 250 per Troy ounce in mid 2010. It traded in July, 2010, at about US$4,000–4,500/kg.
Aluminium
Aluminium is a widely used, mined, refined and trusted metal. The fortunes of this metal are linked to the rise and fall of the aircraft, electrical and automotive industries.The price of aluminium was 80 US cents per lb in 1995 and 45 cents per lb in 1998 and hovered around this until the January 2003, when it started to rise to $1.50 per pound and in 2006 and $1.40 per lb in the December of 2007. It collapsed down to a mere 60 cents per lb in the November of 2008, but is now hovering at about $1.00 per lb, with a new April peak of $1.10 per pound of aluminium.
Nickel
The price of nickel boomed in the late 1990s, then imploded from around $51,000 /£36,700 per metric tonneTonne
The tonne, known as the metric ton in the US , often put pleonastically as "metric tonne" to avoid confusion with ton, is a metric system unit of mass equal to 1000 kilograms. The tonne is not an International System of Units unit, but is accepted for use with the SI...
in May 2007 to about $11,550/£8,300 per metric ton in January 2009. Prices were only just starting to recover as of January 2010, but most of Australia's nickel mines had gone bankrupt by then. As the price for high grade nickel sulphate ore
Ore
An ore is a type of rock that contains minerals with important elements including metals. The ores are extracted through mining; these are then refined to extract the valuable element....
recovered in 2010, so did the Australian mining industry. Battery recycling
Battery recycling
Battery recycling is a recycling activity that aims to reduce the number of batteries being disposed as municipal solid waste. Batteries contain a number of heavy metals and toxic chemicals, their dumping has raised concern over risks of soil contamination and water pollution.-Battery recycling by...
has helped bring down both the nickel and cadmium prices.
Copper
Tonne
The tonne, known as the metric ton in the US , often put pleonastically as "metric tonne" to avoid confusion with ton, is a metric system unit of mass equal to 1000 kilograms. The tonne is not an International System of Units unit, but is accepted for use with the SI...
from 1990 until 1999, when it fell to about $1,600. The price slump lasted until 2004 which saw a price surge that had copper reaching $9,000 per tonne in the May of 2006, but it eventually fell down to $7,040 per tonne in early 2008. When the slump came, it hit some copper mining countries like the Democratic Republic of the Congo
Democratic Republic of the Congo
The Democratic Republic of the Congo is a state located in Central Africa. It is the second largest country in Africa by area and the eleventh largest in the world...
(D.R.C.) very hard. Mining authorities announced on 10 December 2009, that the Dikulushi mine
Dikulushi Mine
The Dikulushi mine is a copper mine and silver mine in the Democratic Republic of the Congo. It is located some west of Lake Mweru and north of Kilwa in the Moero Sector of Pweto Territory, Katanga Province....
, which is situated in the D.R.C.’s Katanga Province
Katanga Province
Katanga Province is one of the provinces of the Democratic Republic of the Congo. Between 1971 and 1997, its official name was Shaba Province. Under the new constitution, the province was to be replaced by four smaller provinces by February 2009; this did not actually take place.Katanga's regional...
, would close due to poor copper prices.
Rhodium
RhodiumRhodium
Rhodium is a chemical element that is a rare, silvery-white, hard and chemically inert transition metal and a member of the platinum group. It has the chemical symbol Rh and atomic number 45. It is composed of only one isotope, 103Rh. Naturally occurring rhodium is found as the free metal, alloyed...
prices rose brief during the millennium
Millennium
A millennium is a period of time equal to one thousand years —from the Latin phrase , thousand, and , year—often but not necessarily related numerically to a particular dating system....
period due to increased demand, then collapsed to nearly their original 1995-7 starting price of $500/oz between 2002 and 2004.
Later on, the mysterious and unexpected Rhodium price bubble of 2008 suddenly increased prices from just over $500/oz in late 2006 to $9,000/oz-$9,500/oz in July 2008, only for the price then to tumble down only $1,000/oz in January 2009. Both an increase in demand in the American automotive industry, a herd instinct among investors, a then bullish market in rare metals and a rogue speculator or rogue speculators on Wall Street
Wall Street
Wall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...
were all at least partly to blame for the sudden rise and fall in the rare metal's price.
Palladium
Most palladium is used for catalytic converterCatalytic converter
A catalytic converter is a device used to convert toxic exhaust emissions from an internal combustion engine into non-toxic substances. Inside a catalytic converter, a catalyst stimulates a chemical reaction in which noxious byproducts of combustion are converted to less toxic substances by dint...
s in the automobile industry. It is also used for some medical, high grade steel, industrial, dental and electronic purposes.
Palladium
Palladium
Palladium is a chemical element with the chemical symbol Pd and an atomic number of 46. It is a rare and lustrous silvery-white metal discovered in 1803 by William Hyde Wollaston. He named it after the asteroid Pallas, which was itself named after the epithet of the Greek goddess Athena, acquired...
prices rose sharply during the millennium
Millennium
A millennium is a period of time equal to one thousand years —from the Latin phrase , thousand, and , year—often but not necessarily related numerically to a particular dating system....
period due to increased demand, then collapsed to nearly their original starting price by the end 2002, only to start to rise less dramatically in 2006 the year. Palladium
Palladium
Palladium is a chemical element with the chemical symbol Pd and an atomic number of 46. It is a rare and lustrous silvery-white metal discovered in 1803 by William Hyde Wollaston. He named it after the asteroid Pallas, which was itself named after the epithet of the Greek goddess Athena, acquired...
prices in 1992 and 2002–04 was about $200/oz. It rapidly shot up to approximately $1,000/oz between 1999–2001 and collapsed to only $200/oz by late 2002, but is now just under $500/oz per of Palladium in 2010.
In the run up to 2000, Russian supply of palladium to the global market was repeatedly delayed and disrupted because the export quota was not granted on time, for political reasons. The ensuing market panic drove the palladium price to an all-time high of $1,100 per troy ounce
Troy ounce
The troy ounce is a unit of imperial measure. In the present day it is most commonly used to gauge the weight of precious metals. One troy ounce is nowadays defined as exactly 0.0311034768 kg = 31.1034768 g. There are approximately 32.1507466 troy oz in 1 kg...
in January 2001. Around this time, the Ford Motor Company
Ford Motor Company
Ford Motor Company is an American multinational automaker based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford and Lincoln brands, Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK...
, fearing auto vehicle production disruption due to a possible palladium shortage, stockpiled large amounts of the metal purchased near the price high. When prices fell in early 2001, Ford lost nearly US$1 billion. World demand for palladium increased from 100 tons in 1990 to nearly 300 tons in 2000. The global production of palladium from mines was 222 metric tons in 2006 according to the USGS.
Lead
The price of lead rose sharply in early 2007, then collapsed to nearly their original starting price by the end of the next year. Lead prices began to rise in early 2007 due to increased word wide demand. Prices were about $1,200 per tonne of lead in the July, then rose to $2,220 per tonneTonne
The tonne, known as the metric ton in the US , often put pleonastically as "metric tonne" to avoid confusion with ton, is a metric system unit of mass equal to 1000 kilograms. The tonne is not an International System of Units unit, but is accepted for use with the SI...
by September and collapsed back down to $1,200 per tonne in the October of that year. Despite the bullish market condition, the price had collapsed by the July of 2009 and was only worth about $1,400 per tonne of lead. The lead and zinc markets became rather bearish for several months afterwards. Prices were hovering at between $1,770 and $2,175 per tonne as the markets became more bullish and increased prices after China's car scrapping scheme had caused a general upturn in lead, zinc, cadmium and aluminium production. By the June of 2010, prices stood at only $870 per tonne, and were back to about $2,200 in the July of 2010.
Zinc
The price of zincZinc
Zinc , or spelter , is a metallic chemical element; it has the symbol Zn and atomic number 30. It is the first element in group 12 of the periodic table. Zinc is, in some respects, chemically similar to magnesium, because its ion is of similar size and its only common oxidation state is +2...
rose sharply in early 2007 after a five-year secular bear market, then collapsed to nearly their original starting price by the end of the next year. Zinc also exhibited similar bullish trading patterns as most metals did since 2004, but with a different overall price.
Zinc sale prices were 80 cents per pound in July 2008, which was typical of its 2004–2008 pricing levels. By January 2009 it had bottomed out and was worth 45 cents per lb. A spectacular bull market and increased Chinese interest in galvanised construction steel caused prices to top off at $1.20 per pound of metal by January 2010. It then quickly fell back to a routine 80 cents by July 2010.
Zinc is popular in manufacturing and building; its ability to create corrosion
Corrosion
Corrosion is the disintegration of an engineered material into its constituent atoms due to chemical reactions with its surroundings. In the most common use of the word, this means electrochemical oxidation of metals in reaction with an oxidant such as oxygen...
-resistant zinc plating
Galvanization
Galvanization is the process of applying a protective zinc coating to steel or iron, in order to prevent rusting. The term is derived from the name of Italian scientist Luigi Galvani....
of steel (hot-dip galvanizing
Hot-dip galvanizing
Hot-dip galvanizing is a form of galvanization. It is the process of coating iron, steel, or aluminum with a thin zinc layer, by passing the metal through a molten bath of zinc at a temperature of around 860 °F...
) is the major application for zinc. Other applications are in batteries and alloys, such as brass. A variety of zinc compounds are commonly used, such as zinc carbonate and zinc gluconate
Zinc gluconate
Zinc gluconate is the zinc salt of gluconic acid. It is an ionic compound consisting of two moles of gluconate for each mole of zinc...
(as dietary supplements), zinc chloride
Zinc chloride
Zinc chloride is the name of chemical compound with the formula ZnCl2 and its hydrates. Zinc chlorides, of which nine crystalline forms are known, are colorless or white, and are highly soluble in water. ZnCl2 itself is hygroscopic and even deliquescent. Samples should therefore be protected from...
(in deodorants), zinc pyrithione
Zinc pyrithione
Zinc pyrithione is a coordination complex of zinc. This colourless solid is used as an antifungal and antibacterial agent. This coordination complex, which has many names, was first reported in the 1930s.- Structure of the compound :...
(anti-dandruff
Dandruff
Dandruff is the shedding of dead skin cells from the scalp . Dandruff is sometimes caused by frequent exposure to extreme heat and cold. As it is normal for skin cells to die and flake off, a small amount of flaking is normal and common; about 487,000 cells/cm2 get released normally after...
shampoos), zinc sulfide (in luminescent paints), and zinc methyl or zinc diethyl in the organic laboratory.
Neodymium
NeodymiumNeodymium
Neodymium is a chemical element with the symbol Nd and atomic number 60. It is a soft silvery metal that tarnishes in air. Neodymium was discovered in 1885 by the Austrian chemist Carl Auer von Welsbach. It is present in significant quantities in the ore minerals monazite and bastnäsite...
, a fairly rare metal which is used in high grade magnets, saw its prices rise due to increased demand, as were typical of this general market trend. The average price was $16.10 per kg in November and December 2009, but it began trading in June 2010 at $20–$45 per kg.
Neodymium serves as a constituent of high strength neodymium magnets, which are widely used in loudspeakers, computer hard drives, high power-per-weight electric motor
Electric motor
An electric motor converts electrical energy into mechanical energy.Most electric motors operate through the interaction of magnetic fields and current-carrying conductors to generate force...
s (e.g. for those in hybrid cars) and in high efficiency generators (such as aircraft and wind turbine
Wind turbine
A wind turbine is a device that converts kinetic energy from the wind into mechanical energy. If the mechanical energy is used to produce electricity, the device may be called a wind generator or wind charger. If the mechanical energy is used to drive machinery, such as for grinding grain or...
generators).
There was also a strong resurgence of interest in wind farms by the UK government between 2008 and 2010 due to the continuing fears of insecurity in Middle Eastern oil supplies to the industrialised nations and after the closure of several old and economically/environmentally unviable coal-fuelled power stations earlier that decade. This helped the price to rally in 2010.
Other metals
The cadmiumCadmium
Cadmium is a chemical element with the symbol Cd and atomic number 48. This soft, bluish-white metal is chemically similar to the two other stable metals in group 12, zinc and mercury. Similar to zinc, it prefers oxidation state +2 in most of its compounds and similar to mercury it shows a low...
, tantalium, manganese
Manganese
Manganese is a chemical element, designated by the symbol Mn. It has the atomic number 25. It is found as a free element in nature , and in many minerals...
, thulium
Thulium
Thulium is a chemical element that has the symbol Tm and atomic number 69. Thulium is the second least abundant of the lanthanides . It is an easily workable metal with a bright silvery-gray luster...
, iron, tin
Tin
Tin is a chemical element with the symbol Sn and atomic number 50. It is a main group metal in group 14 of the periodic table. Tin shows chemical similarity to both neighboring group 14 elements, germanium and lead and has two possible oxidation states, +2 and the slightly more stable +4...
, chromium, indium
Indium
Indium is a chemical element with the symbol In and atomic number 49. This rare, very soft, malleable and easily fusible post-transition metal is chemically similar to gallium and thallium, and shows the intermediate properties between these two...
, columbium/niobium
Niobium
Niobium or columbium , is a chemical element with the symbol Nb and atomic number 41. It's a soft, grey, ductile transition metal, which is often found in the pyrochlore mineral, the main commercial source for niobium, and columbite...
, cobalt
Cobalt
Cobalt is a chemical element with symbol Co and atomic number 27. It is found naturally only in chemically combined form. The free element, produced by reductive smelting, is a hard, lustrous, silver-gray metal....
, molybdenum
Molybdenum
Molybdenum , is a Group 6 chemical element with the symbol Mo and atomic number 42. The name is from Neo-Latin Molybdaenum, from Ancient Greek , meaning lead, itself proposed as a loanword from Anatolian Luvian and Lydian languages, since its ores were confused with lead ores...
and vanadium
Vanadium
Vanadium is a chemical element with the symbol V and atomic number 23. It is a hard, silvery gray, ductile and malleable transition metal. The formation of an oxide layer stabilizes the metal against oxidation. The element is found only in chemically combined form in nature...
prices rose sharply in early 2007, then collapsed to nearly their original starting price by the end of the next year
due to uncertainty about supplies matching the demand, especially those of the BRIC
BRIC
In economics, BRIC is a grouping acronym that refers to the countries of Brazil, Russia, India and China, which are all deemed to be at a similar stage of newly advanced economic development...
countries' electronics
Electronics
Electronics is the branch of science, engineering and technology that deals with electrical circuits involving active electrical components such as vacuum tubes, transistors, diodes and integrated circuits, and associated passive interconnection technologies...
industries.
Niobium is used in the steel of gas pipe lines
Pipeline transport
Pipeline transport is the transportation of goods through a pipe. Most commonly, liquids and gases are sent, but pneumatic tubes that transport solid capsules using compressed air are also used....
due to the alloy
Alloy
An alloy is a mixture or metallic solid solution composed of two or more elements. Complete solid solution alloys give single solid phase microstructure, while partial solutions give two or more phases that may or may not be homogeneous in distribution, depending on thermal history...
's high strength and low corrosion
Corrosion
Corrosion is the disintegration of an engineered material into its constituent atoms due to chemical reactions with its surroundings. In the most common use of the word, this means electrochemical oxidation of metals in reaction with an oxidant such as oxygen...
rate.
Battery recycling has helped bring down both the nickel and cadmium
Cadmium
Cadmium is a chemical element with the symbol Cd and atomic number 48. This soft, bluish-white metal is chemically similar to the two other stable metals in group 12, zinc and mercury. Similar to zinc, it prefers oxidation state +2 in most of its compounds and similar to mercury it shows a low...
prices. About 86% of all cadmium production was used in batteries during 2009. The rapid growth of wind farm
Wind farm
A wind farm is a group of wind turbines in the same location used to produce electric power. A large wind farm may consist of several hundred individual wind turbines, and cover an extended area of hundreds of square miles, but the land between the turbines may be used for agricultural or other...
s and heavy duty magnets has made neodymium prices rally again and both Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
and China's renewed interest in high grade steel has improved the Vanadium price recently. The way these metal's prices rose and fell due to increased demand, were typical of this general market trend.
Sulphuric acid
Poland
Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...
and increased demand in China, the acid’s price soared to $329/tonne in May 2008, from just $90/tonne in October 2007. It has become steadily cheaper since the start of 2010.
Most industrial chemicals exhibited similar price trends due to bad weather in the EU and USA along with increased demand by the BRIC
BRIC
In economics, BRIC is a grouping acronym that refers to the countries of Brazil, Russia, India and China, which are all deemed to be at a similar stage of newly advanced economic development...
nations.
Chlorine
Chlorine products such as P.V.C.PVC
Polyvinyl chloride is a plastic.PVC may also refer to:*Param Vir Chakra, India's highest military honor*Peripheral venous catheter, a small, flexible tube placed into a peripheral vein in order to administer medication or fluids...
plastics, caustic soda, industrial paper bleach and ordinary household and industrial bleach
Bleach
Bleach refers to a number of chemicals that remove color, whiten, or disinfect, often via oxidation. Common chemical bleaches include household chlorine bleach , lye, oxygen bleach , and bleaching powder...
s saw their prices rise sharply in 2008 as a result of volatility on the world's chlorine
Chlorine
Chlorine is the chemical element with atomic number 17 and symbol Cl. It is the second lightest halogen, found in the periodic table in group 17. The element forms diatomic molecules under standard conditions, called dichlorine...
market.
As a result of fight of supply and high operating rates in May 1997, two chlorine producers took the bold initiative of calling for an average price rice of $25 per short ton. Other producers were considering bringing the total price increase for the 1997 product year to date of up to $80 per short and fob ton, from $45–$50 per short and fob ton in May 1996. This occurred as both rapidly ascending demand from the vinyl polymer
Vinyl polymer
Vinyl polymers are a group of polymers derived from vinyl monomers. Their backbone is an extended alkane chain, made by polymerizing an alkene group into a chain . In popular usage, "vinyl" refers only to polyvinyl chloride...
chain market and the unusually strong seasonal demand and no new production capacity on the immediate horizon coincided. The price increase had its firm foundations in the incumbent bullish market dynamics of the mid 2000s. Occidental Chemical Corporation suggested a minor rise as other firms took a "wait-and-see approach" and Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
raised production slightly to ease the cost of domestic bleach and swimming pool chloro-tablet costs.
Chlorine prices rose in May 2005 as both growing energy costs, shrinking supply and high market tariffs
Tariff
A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....
in the EU, NAFTA and Latin America, the increased use of chlorine-based chemicals for the aquatics industry. The price of chlorine caustic was $350 per dry short ton
Ton
The ton is a unit of measure. It has a long history and has acquired a number of meanings and uses over the years. It is used principally as a unit of weight, and as a unit of volume. It can also be used as a measure of energy, for truck classification, or as a colloquial term.It is derived from...
, up from $100 last March. Chlorine was priced at $330 per dry short ton, up $130 on 2008's price of $200.
The gas's price steadily increased throughout 2007 and early 2008 as demand for P.V.C.
PVC
Polyvinyl chloride is a plastic.PVC may also refer to:*Param Vir Chakra, India's highest military honor*Peripheral venous catheter, a small, flexible tube placed into a peripheral vein in order to administer medication or fluids...
and some metals like copper, Neodymium and Tantalum rose due to the increased growth of the BRIC
BRIC
In economics, BRIC is a grouping acronym that refers to the countries of Brazil, Russia, India and China, which are all deemed to be at a similar stage of newly advanced economic development...
countries demand for electrical goods.
America
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
’s chlorine prices rose suddenly from about $125–$150 per ton fob between June and August 2009 months on a sharp rise in chlor-alkali production and capacity cuts after a year in which production quotes largely stay flat. The spot price surged more than 300% to about $475–$525 ton fob in August 2009. Both Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
and the European Union were also increasing chlorine production to stabilise world prices.
Non discounted American chlorine
Chlorine
Chlorine is the chemical element with atomic number 17 and symbol Cl. It is the second lightest halogen, found in the periodic table in group 17. The element forms diatomic molecules under standard conditions, called dichlorine...
was priced at $390–410 short ton and discounted prices stood at $300 per short ton
Short ton
The short ton is a unit of mass equal to . In the United States it is often called simply ton without distinguishing it from the metric ton or the long ton ; rather, the other two are specifically noted. There are, however, some U.S...
between November 2009 and February 2010. As the European chlorine production spiked in November to a daily output of 26,971 tonnes, before falling to 23,667 short ton in December due to the Christmas and New Year holidays. Production was about European production was 25.8% higher than December 2008 levels.
The economic fallout and aftermath
Many firms, individuals, and hedge funds went bankrupt or suffered heavy losses due to purchasing commodities at high prices only to see their values decline sharply in mid to late 2008. Many manufacturing companies were also crippled by the rising cost of oil and other commodities such as transition metals.The 2008 price glitch
In the second half of 2008, the prices of most commodities fell dramatically on expectations of diminished demand in the world recession and credit crunch. Prices began to rise again in late 2009 to mid 2010.Mine closures
The heavy price volatility caused a sudden boom then bust in the mining industry across the Democratic Republic of the CongoDemocratic Republic of the Congo
The Democratic Republic of the Congo is a state located in Central Africa. It is the second largest country in Africa by area and the eleventh largest in the world...
, Zambia, Zimbabwe
Zimbabwe
Zimbabwe is a landlocked country located in the southern part of the African continent, between the Zambezi and Limpopo rivers. It is bordered by South Africa to the south, Botswana to the southwest, Zambia and a tip of Namibia to the northwest and Mozambique to the east. Zimbabwe has three...
, China and Australia. The $900,000,000 Tenke Fungurume copper-cobalt mining project in the Democratic Republic of Congo was cleared on February 2008 for building to start in a years time and then Luanshya Copper Mine in Zambia
Zambia
Zambia , officially the Republic of Zambia, is a landlocked country in Southern Africa. The neighbouring countries are the Democratic Republic of the Congo to the north, Tanzania to the north-east, Malawi to the east, Mozambique, Zimbabwe, Botswana and Namibia to the south, and Angola to the west....
closed on 6 March 2009. Zimbabwe
Zimbabwe
Zimbabwe is a landlocked country located in the southern part of the African continent, between the Zambezi and Limpopo rivers. It is bordered by South Africa to the south, Botswana to the southwest, Zambia and a tip of Namibia to the northwest and Mozambique to the east. Zimbabwe has three...
and Australia also saw nickel and copper mines open close during this time. China has opened several new coal mines in Qinghai
Qinghai
Qinghai ; Oirat Mongolian: ; ; Salar:) is a province of the People's Republic of China, named after Qinghai Lake...
province during the years 2007 and 2008.
The 34th G8 summit
The food and fuel crises were both discussed at the 34th G8 summit34th G8 summit
The 34th G8 summit took place in on the northern island of Hokkaidō, Japan from July 7–9, 2008. The locations of previous summits to have been hosted by Japan include: Tokyo ; and Nago, Okinawa . The G8 Summit has evolved beyond being a gathering of world political leaders...
in July 2008.
Opinions on the 2007–2008 commodities bubble and its aftermath.
Coincidentally, long-only commodity index funds started just before the bubbles, became popular at the same time – by one estimate investment increased from $90 billion in 2006 to $200 billion at the end of 2007, while commodity prices increased 71% – which raised concern as to whether these index funds caused the commodity bubble. The empirical research has been mixed.In February 2008, analyst Gary Dorsch wrote:
Economist James D. Hamilton
James D. Hamilton
James Douglas "Jim" Hamilton is an US econometrician currently teaching at University of California, San Diego. His work is especially influential in time series and energy economics...
has argued that the increase in oil prices in the period of 2007 to 2008 was a significant cause of the recession. He evaluated several different approaches to estimating the impact of oil price shocks on the economy, including some methods that had previously shown a decline in the relationship between oil price shocks and the overall economy. All of these methods "support a common conclusion; had there been no increase in oil prices between 2007:Q3 and 2008:Q2, the US economy would not have been in a recession over the period 2007:Q4 through 2008:Q3." Hamilton's own model, a time-series econometric forecast based on data up to 2003, showed that the decline in GDP could have been successfully predicted to almost its full extent given knowledge of the price of oil. The results imply that oil prices were entirely responsible for the recession; however, Hamilton himself acknowledged that this was probably not the case but maintained that it showed that oil price increases made a significant contribution to the downturn in economic growth.
Synoptic chart on 1990–2010 prices
All prices are in either £, €, $/US$ or AU$, depending on the nationality of sources available.| Commodity | Image | 1990–2010 lowest price per unit | 1990–2010 highest price per unit |
|---|---|---|---|
| Wheat |  |
£11-£15 for discounted and slightly higher for non-discounted wheat (2007) | £91 for both(2010) |
| Recycled paper | £10 (2009) | $235 (2008) | |
| Crude oil | $30 (2005) | $147.30 (2008) | |
| Copper | $1,600 (1999) | $9,000 (2006) | |
| Gold | $252.90 (1999) | $1,364.60(2010) | |
| Aluminum | $0.45 (1998) | $1.50 (2006) | |
| Platinum Platinum Platinum is a chemical element with the chemical symbol Pt and an atomic number of 78. Its name is derived from the Spanish term platina del Pinto, which is literally translated into "little silver of the Pinto River." It is a dense, malleable, ductile, precious, gray-white transition metal... |
$325 (1994) | $2,200 (2007) | |
| Silver |  |
$4 (1992) | $30 (December, 2010) |
| Coal |  |
AU$72.00 (2009) | AU$112.50 (2010) |
| Nickel |  |
£8,300 (2009) | £36,700 (2007) |
| Uranium Uranium Uranium is a silvery-white metallic chemical element in the actinide series of the periodic table, with atomic number 92. It is assigned the chemical symbol U. A uranium atom has 92 protons and 92 electrons, of which 6 are valence electrons... |
 |
$10 (2001) | $300 (2007) |
| Rhodium Rhodium Rhodium is a chemical element that is a rare, silvery-white, hard and chemically inert transition metal and a member of the platinum group. It has the chemical symbol Rh and atomic number 45. It is composed of only one isotope, 103Rh. Naturally occurring rhodium is found as the free metal, alloyed... |
$500 (1995–1997, 2002–2004) | $9,500 (2008) | |
| Palladium Palladium Palladium is a chemical element with the chemical symbol Pd and an atomic number of 46. It is a rare and lustrous silvery-white metal discovered in 1803 by William Hyde Wollaston. He named it after the asteroid Pallas, which was itself named after the epithet of the Greek goddess Athena, acquired... |
$200 (1992, 2002–2004) | $1,100 (2001) | |
| Zinc Zinc Zinc , or spelter , is a metallic chemical element; it has the symbol Zn and atomic number 30. It is the first element in group 12 of the periodic table. Zinc is, in some respects, chemically similar to magnesium, because its ion is of similar size and its only common oxidation state is +2... |
$0.45 (2009) | $1.20 (2010) | |
| Neodymium Neodymium Neodymium is a chemical element with the symbol Nd and atomic number 60. It is a soft silvery metal that tarnishes in air. Neodymium was discovered in 1885 by the Austrian chemist Carl Auer von Welsbach. It is present in significant quantities in the ore minerals monazite and bastnäsite... |
$16.10 (2000’s) | $45 (2010) | |
| Lead | $870 (2010) | $2,220 (2007) | |
| Rhenium Rhenium Rhenium is a chemical element with the symbol Re and atomic number 75. It is a silvery-white, heavy, third-row transition metal in group 7 of the periodic table. With an average concentration of 1 part per billion , rhenium is one of the rarest elements in the Earth's crust. The free element has... |
$4,000–$4,500 (2010) | $6,000 (2009) | |
| Chlorine Chlorine Chlorine is the chemical element with atomic number 17 and symbol Cl. It is the second lightest halogen, found in the periodic table in group 17. The element forms diatomic molecules under standard conditions, called dichlorine... |
 |
$45–$50 for both classes (1996) | $475–$525 (2009) |
| Sulfuric acid Sulfuric acid Sulfuric acid is a strong mineral acid with the molecular formula . Its historical name is oil of vitriol. Pure sulfuric acid is a highly corrosive, colorless, viscous liquid. The salts of sulfuric acid are called sulfates... |
 |
£55 for 95% pure and £40 for 90% pure (2002) | $329 for both in (2008) |
| Others like Chromium and Cadmium | Various in mid 2000’s | Various in late 2000s |
See also
- 2000s energy crisis
- 2007-2008 world food price crisis
- Late-2000s recession
- Dot-com bubbleDot-com bubbleThe dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...
- Digger goldDigger goldDigger gold is the common slang term for gold recovered from electronics components such as board fingers, CPUs, and connector pins. For the gold fingers on boards or circuits, often a stripping solution is used to remove the gold from the board material, nitric acid also works well in this regard...
- Battery recyclingBattery recyclingBattery recycling is a recycling activity that aims to reduce the number of batteries being disposed as municipal solid waste. Batteries contain a number of heavy metals and toxic chemicals, their dumping has raised concern over risks of soil contamination and water pollution.-Battery recycling by...
- eDayEDayeDay is a term that refers to the peak sales day for the online retail sector in the United States. The term was coined by web analytics and precision marketing firm Coremetrics.-eDays by year:* December 5, 2005....
- Electronic wasteElectronic wasteElectronic waste, e-waste, e-scrap, or Waste Electrical and Electronic Equipment describes discarded electrical or electronic devices. There is a lack of consensus as to whether the term should apply to resale, reuse, and refurbishing industries, or only to product that cannot be used for its...
- E-Cycling
- Tantalum capacitorTantalum capacitorThe tantalum capacitor is a highly reliable type of electrolytic capacitor, available in both solid-bodied and separately encased forms. The encased "wet" variant is not used often in modern designs...
- PIIGS NationsPIGS (economics)PIGS is an acronym used to refer to the economies of Portugal, Italy, Greece and Spain. Originally, the term was used to group these economies as being similar economic environments. Since the European sovereign debt crisis, with the addition of Ireland, the term is used to group European...
- Environmental Waste Controls plc
- I-recycleI-recycleThe aim of I-recycle is to provide a central point for people offering items that they no longer require or need. The passing on of these items reduces the amount of usable goods going to landfill sites across the UK....
- PowerGenixPowerGenixPowerGenix is a San Diego-based company developing rechargeable batteries, Nickel-zinc and recycling batteries. Nickel-Zinc are generally viewed much safer than Nickel-cadmium. Cadmium is banned in the EU, Toys R Us and Mattel...
- RecyclingRecyclingRecycling is processing used materials into new products to prevent waste of potentially useful materials, reduce the consumption of fresh raw materials, reduce energy usage, reduce air pollution and water pollution by reducing the need for "conventional" waste disposal, and lower greenhouse...
- letsrecycle.comLetsrecycle.comletsrecycle.com is a UK based website for reporting news and information related to the waste management and recycling industries. The website produces daily updates and information and is one of the key providers of news in the UK waste industry...
- Damaged goods (business strategy) sometimes termed "crippleware"
- Arizona Cartridge Remanufacturers Association Inc. v. Lexmark International Inc.Arizona Cartridge Remanufacturers Association Inc. v. Lexmark International Inc.Arizona Cartridge Remanufacturers Association Inc. v. Lexmark International Inc. 421 F.3d 981 was a decision by the United States Court of Appeals for the Ninth Circuit which ruled that an End User License Agreement on a physical box can be binding on consumers who signal their acceptance of the...