CAPE TOWN (miningweekly.com) – The global commodities market was at a “very delicate” and “overly pessimistic” stage, Credit Suisse Commodities Research head Ric Deverell said on Monday.
Deverell told the Investing In African Mining Indaba, attended by a record 7 500 delegates, that the reason why he was optimistic was a consequence of the recovery in the US coupled to the absence of negative economic news from Europe in the last nine months.
His view was that the world commodities market was set to look much like 2002.
“I think the pessimists are wrong but prices won’t be off to the races,” Deverell added.
He said that the self-induced slowdown in China had since bottomed and was now beginning to tick up in that contraction was taking place at a lesser rate.
Investment was now 49.8% of gross domestic product in China.
Chinese exports had been weaker as a result of the lower demand of the Western Atlantic economies.
“The main thing that has happened to China is Europe.”
There had been a 39% downfall in Chinese exports to Europe, which remained an important part of the global economic system despite not growing and importing less.
Japan, which had been an outright disaster as far as commodities imports were concerned, was beginning to restimulate, which was a positive.
“I think that things are getting better” as global growth begins to lift above 3.5%.
Deverell thinks gold has passed its heyday as the financial system begins to heal.
He forecast that commodities prices would remain high but not go much higher.
Edited by: Creamer Media Reporter
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