Why are base metal prices crashing again after clear signs of recuperation



The article points out the probable reasons behind decreasing price of Metals. Metals, an essential input for infrastructure and construction Industry, have seen a steep decline in demand because of the slow economic growth worldwide especially from China. In addition, other factors like declining crude oil prices, existing surpluses, strong US dollar as a financial Investment substitute, have also contributed to the downward movement of the Metal prices.


Topics include Determinants of Demand, Price Elasticity of Demand, Substitutes and Cross Price Elasticity of Demand. Explain using the formulae of Elasticity and market diagrams for Metals.


Evaluation will cover effect of Metal prices on Industries (Producers), Consumers (availability of cheaper metals, loss of employment), Government and Society (consequences of low Demand and the ensuing lower Economic Growth) in short term and long term.