An important ‘business-as-usual’ development: the London Metals Exchange has brought out a steel futures contract which, amazingly has not previously existed. Volatility in world steel prices should amply justify this move and, provided enough creditworthy (!) players enter the LME’s famous Trading Ring to provide liquidity, it looks like a good move. Plenty of commodity traders have been doing nicely, thank you, so this shouldn’t be a problem.
Also doing nicely have been steel manufacturers, given
Some relief is on hand, however, in the form of fast-reducing dry bulk shipping costs, which have been at very high levels and representing a huge proportion of costs in the iron and steel industry. As forecast in the C@W Predictions for 2008, freight rates have been slumping - no mystery, a glut of new ships being built.
And a couple of other Prediction updates:
- GOLD blipped above $ 950 this morning (we predict it topping $ 1000)
- CHINESE food price inflation is 18.2% (we predict a riot ...)