End-use markets play a big role in optimising the demand and supply as well as fixing the prices of commodities. Verdict has conducted a poll to analyse declining demand from which end-use markets will have the biggest impact on commodity demand.
A majority 26% of the poll respondents opined that the declining demand from the construction segment will have the biggest impact on commodity demand, while 24% voted that the declining demand from power sector will have biggest impact.
Further, 19% of the respondents opined that declining demand for jewellery making will have the biggest impact, while 16% believe that declining demand from automotive industry will impact commodity demand.
The remaining 15% of the respondents voted that declining demand for electric vehicles will have the biggest impact on commodity demand.
The analysis is based on 207 responses received from the readers of Mining Technology, a Verdict network site, between 12 August 2020 and 01 March 2021.
COVID-19 impact on commodity markets
The COVID-19 outbreak and its containment measures impacted the demand and supply chain in commodity markets significantly. Industrials metals sector was most affected due to the global slowdown in economic activity although precious metals demand rose as investor confidence in gold rose. Copper, zinc, and platinum were some of the main metals that were affected due to the impact of COVID-19 on end-user markets such as automobiles.
Prices of most metals are recovering to pre-pandemic levels in 2021 as industrial activity in China, the biggest consumer of metals, is returning to normal. In the long term, however, the global commodity market will be impacted by the rise in transport costs, changing consumer behaviour, change in supply chains and policy responses to tackle commodity price shocks.