It’s official: the commodity boom has gone bust.

While this might not be the case for all commodities – certainly not for metals such as copper – the commodity prices that carried the past two year’s National Budget, giving Treasury a welcome windfall, have dropped. And along with it, the mining industry’s profits.

Following the Covid-19 pandemic, commodities soared, which surprised us all: the expectation was that there would be a more gradual increase in demand. Platinum-group metals went through the roof. Iron exploded. Prices rose across the board, and in some cases, even doubled.

But now, we’re seeing a similarly abrupt drop. According to the World Bank, “Weakness in China’s heavy industry and housing construction sectors has been offset by resilient demand in the manufacturing of metals-intensive renewable energy products, amid ample metal supply. Following a projected decline of 12% in 2023, base metal prices are expected to fall 5% in 2024 due to slowing demand.”

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Source: Insurance Biz