S&P; is warning record high commodity prices may represent an unsustainable bubble, subject to a sudden correction, especially if the Chinese economy is hit by a significant deceleration or downturn. Here is their price target (in case of a crash) for some commodities:

“Aluminum: $0.65-$0.70/lb, compared with about $1.20 presently.
Copper: $1.50-$1.75/lb, compared with about $4.10 presently.
Iron ore: $85-$95/ton, compared with about $170-$175 presently.
Coking coal (seaborne at mine): $100-$120/ton, compared with about $180 presently.
Steel, hot rolled coil: $475-$525/ton, compared with about $750-$760 presently.”
Full article here.


In another related article, Mr. Gary Shilling alerts:
The bursting of the commodities bubble will be bad news for developing-country producers such as Brazil, which has thus far largely escaped recent global economic and financial woes but is a major exporter of iron ore and other commodities to China. Developed commodity exporters — Canada, New Zealand and Australia — as well as their currencies, may also suffer.”
Full article here.

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