A new International Monetary Fund report released in September 2006 concluded that metal prices, after a remarkable run-up, are expected to decline as additional production capacity enters the market. Speculation, the IMF argued, played only a minor role in driving commodity prices higher.
Since 2002, metals prices have climbed 180 percent in real terms, outpacing even the 157-percent rise in oil over the same period. China's rapid economic expansion accounted for roughly half of the global increase in consumption of copper, aluminum, nickel, steel and related metals over those four years.
The IMF identified surging demand from fast-growing economies as the primary force behind the price rally, and noted that supply had struggled to keep pace. Production is now catching up, and futures markets indicate that aluminum and copper prices exceed sustainable levels.
Under the IMF's baseline forecast, aluminum prices could drop 35 percent and copper prices 57 percent by 2010. Meanwhile, copper in London briefly topped 8,000 dollars per tonne, even as Chile's Escondida mine resumed operations following a labor strike.
Historical summary. TurkishPress restated this wire report, first published in September 2006, in its own words.