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You, too, can be a commodity market expert. Don’t scoff. The abrupt, unexpected moves in recent weeks – including a record-breaking 19-per-cent jump in iron ore’s price on Monday – may make you fear that understanding the dynamics of the metals markets is beyond any mortal’s ken.
Fortunately, I’ve spent the past four days attending the annual Prospectors & Developers Association of Canada Conference in Toronto. The massive get-together of mining-industry movers and shakers was illuminating.
I emerged with three hard nuggets of insight, extracted from multiple interviews and presentations, then purified in the blast furnace of the journalistic mind.
I’m happy to share these treasures so you, too, can understand the commodity markets just as well – or just as poorly – as I do. Here goes:
It’s all about China. No kidding, right? The Asian giant gobbles up half of the world’s production of most industrial metals. As goes its economy, so goes the outlook for those metals.
Still, it’s amazing how this simple truth can get overlooked. The knowledgeable folks at the PDAC convention largely yawned at the jump in iron prices on Monday, arguing it simply wasn’t consistent with China’s growth trajectory.
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