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The boom in mineral markets: How long might it last?

Author

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  • Radetzki, Marian
  • Eggert, Roderick G.
  • Lagos, Gustavo
  • Lima, Marcos
  • Tilton, John E.

Abstract

The commodity price boom that emerged in 2004 has proved far more persevering than its predecessors of 1950 and 1973. Some analysts have suggested that it may represent the start of a "supercycle" caused by the voracious raw materials demand from China and other emerging economies, with prices remaining high for 20-30 years. We offer an alternative explanation. For a variety of reasons, the establishment of new capacity in minerals and energy to match the accelerated demand trends is more time consuming than commonly assumed, and may take a decade or longer. As soon as the new capacity is in place, however, the boom will be punctuated. Prices may collapse much earlier in the event of a severe recession that cuts the growth in commodity demand.

Suggested Citation

  • Radetzki, Marian & Eggert, Roderick G. & Lagos, Gustavo & Lima, Marcos & Tilton, John E., 2008. "The boom in mineral markets: How long might it last?," Resources Policy, Elsevier, vol. 33(3), pages 125-128, September.
  • Handle: RePEc:eee:jrpoli:v:33:y:2008:i:3:p:125-128
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    References listed on IDEAS

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    1. Radetzki, Marian, 2006. "The anatomy of three commodity booms," Resources Policy, Elsevier, vol. 31(1), pages 56-64, March.
    2. John T Cuddington & Daniel Jerrett, 2008. "Super Cycles in Real Metals Prices?," IMF Staff Papers, Palgrave Macmillan, vol. 55(4), pages 541-565, December.
    3. Radetzki,Marian, 2008. "A Handbook of Primary Commodities in the Global Economy," Cambridge Books, Cambridge University Press, number 9780521880206, Junio.
    4. Crowson, P., 2001. "Mining industry profitability?," Resources Policy, Elsevier, vol. 27(1), pages 33-42, March.
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    Cited by:

    1. John Baffes & Cristina Savescu, 2014. "Monetary conditions and metal prices," Applied Economics Letters, Taylor & Francis Journals, vol. 21(7), pages 447-452, May.
    2. John Baffes & Damir Cosic, 2014. "Global Economic Prospects : Commodity Markets Outlook, January 2014," World Bank Publications, The World Bank, number 18996.
    3. Kagraoka, Yusho, 2016. "Common dynamic factors in driving commodity prices: Implications of a generalized dynamic factor model," Economic Modelling, Elsevier, vol. 52(PB), pages 609-617.
    4. Farooki, Masuma, 2012. "The diversification of the global mining equipment industry – Going new places?," Resources Policy, Elsevier, vol. 37(4), pages 417-424.
    5. World Bank, 2011. "Global Economic Prospects, Volume 2, January 2011 : Navigating Strong Currents
      [Perspectivas economicas mundiales, Enero de 2011 : navegar en aguas peligrosas (Vol. 2)]
      ," World Bank Publications, The World Bank, number 12102.
    6. Humphreys, David, 2010. "The great metals boom: A retrospective," Resources Policy, Elsevier, vol. 35(1), pages 1-13, March.
    7. Buncic, Daniel & Moretto, Carlo, 2015. "Forecasting copper prices with dynamic averaging and selection models," The North American Journal of Economics and Finance, Elsevier, vol. 33(C), pages 1-38.
    8. repec:wbk:wbpubs:12097 is not listed on IDEAS
    9. Tano, Sofia & Pettersson, Örjan & Stjernström, Olof, 2016. "Labour income effects of the recent “mining boom” in northern Sweden," Resources Policy, Elsevier, vol. 49(C), pages 31-40.
    10. Fizaine, Florian, 2013. "Byproduct production of minor metals: Threat or opportunity for the development of clean technologies? The PV sector as an illustration," Resources Policy, Elsevier, vol. 38(3), pages 373-383.
    11. Cuddington, John T. & Zellou, Abdel M., 2013. "A simple mineral market model: Can it produce super cycles in prices?," Resources Policy, Elsevier, vol. 38(1), pages 75-87.
    12. Jerrett, Daniel & Cuddington, John T., 2008. "Broadening the statistical search for metal price super cycles to steel and related metals," Resources Policy, Elsevier, vol. 33(4), pages 188-195, December.
    13. Kleijn, René & van der Voet, Ester & Kramer, Gert Jan & van Oers, Lauran & van der Giesen, Coen, 2011. "Metal requirements of low-carbon power generation," Energy, Elsevier, vol. 36(9), pages 5640-5648.
    14. Koek, Monica & Kreuzer, Oliver P. & Maier, Wolfgang D. & Porwal, Alok K. & Thompson, Mickey & Guj, Pietro, 2010. "A review of the PGM industry, deposit models and exploration practices: Implications for Australia's PGM potential," Resources Policy, Elsevier, vol. 35(1), pages 20-35, March.
    15. Hurst, Luke, 2015. "Assessing the competitiveness of the supply side response to China's iron ore demand shock," Resources Policy, Elsevier, vol. 45(C), pages 247-254.
    16. Bürgi Bonanomi, Elisabeth & Elsig, Manfred & Espa, Ilaria, 2015. "The Commodity Sector and Related Governance Challenges from a Sustainable Development Perspective: The Example of Switzerland Current Research Gaps," Papers 865, World Trade Institute.

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