The commodity market’s “supercycle” of strong growth is waning, OPEC said on Wednesday, with commodity prices currently in transition mode to slower growth rates.
OPEC (the Organization of the Petroleum Exporting Countries) joined a chorus of analysts who have been warning for several months that the era of high prices for commodities is ending.
The group cited a slowdown in emerging economies, in particular China, coupled with decelerating foreign investment in those markets, as an explanation.
“It seems that emerging economies will continue to grow at lower rates than in the past years. China is currently forecast to grow by 7.7 percent this year and next year, considerably lower than its average growth over the past decade,” OPEC said. “This should lead to somewhat lower relative demand changes in the future, and while a decline of commodity prices seems unlikely in general, it also points to slower expected price rises in the future.”