Metal inflation

A term that emerged around 2005 to describe the fact that, globally speaking, the cost of living increases in all countries when the price of metals rises, and here again particularly for copper and nickel. With global production of metals remaining constant, demand swells sharply, especially in developing and emerging countries that are on the road to industrialization. For example, between 2000 and 2009, China alone swallowed about ninety percent of the additional world supply of copper. – On the other hand, an increase in the price of metals – especially nickel – in industrialized countries causes a relative decline in demand as the use of substitutes increases. Their production is now becoming profitable; and customers are more willing to accept the substitutes. In addition, the search for and suitability testing of substitutes for imported raw materials, which are heavily dependent on world market prices, has a very long tradition in the metalworking industry. Since the beginning of the 20th century, great importance has also been attached to technical consulting of customers on the use of substitute products, not least due to the periods of the war economy. – See Petroleum Inflation, Financialization. – Cf. ECB Monthly Bulletin of September 2008, p. 21 (Fluctuations in metal prices depending on speculators; overview).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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