HOT WIRE: COVID-19 Takes Commodity Prices on a Roller Coaster Ride

08/24/2020 IEWC

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COVID-19 Takes Commodity Prices on a Roller Coaster Ride

Leaving few stones unturned, COVID-19 has changed both the economy and our very way of life. Commodity prices are no exception. Why did commodity prices react as they did this year, and how can we use those clues to help us ascertain what the future holds?

Generally speaking, the prices of most commodities moved in the same direction in the first half of the year: lower, into April, as economies shut down, then higher as economies reopened and demand increased. The degree to which prices fell and subsequently recovered, however, varies substantially. From the end of 2019 through April, steel scrap prices fell 9.9%. They then rose 10.3% over the following two months. The volatility was slightly more dramatic in aluminum (18.9% decline, then 9.7% rise) and copper (16.2% decline; 16.4% rise), but both of these pale in comparison to oil (69.1% decline; 108.4% rise)..... [read more]

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  • Readers' Forum
  • A Closer Look: The US Economy
  • ...and more!

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