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Industry News
Prices of raw materials to remain strong - 2008-1-21 Prices of crude oil and other raw materials are expected to remain strong this year on the dollar's global weakness and growing inflation risks, according to a Seoul-based economic think tank, Sunday. In a report on the outlook for raw materials prices, the Korea Center for International Finance said the prospect of an economic slowdown in the United States, a weak dollar and rising inflationary pressures around the world will affect the materials' global demand. A strong demand for raw materials in developing countries, such as China and India, is also one of the key variables, the institute said. As of Jan. 15, the average price of beans stood at $12.33 a bushel, which is 41 percent higher than that in early October. The price of corn had also risen 60 percent to $4.74 a bushel during the same period. Gold prices surpassed $900 an ounce for the first time on Jan. 15, rising 35 percent from August last year, while prices of copper, nickel and aluminum have also gained upward momentum for the past months, the institute said. ``A U.S. economic slowdown may dampen demand for oil and other raw materials. However, the prices will remain strong on forecasts of further interest rate cuts by the United States and a weaker dollar,'' it said. Rising raw materials prices are casting a shadow over the country's economic recovery, fueling concerns that South Korea, a chief importer of oil, metal and grain, will suffer inflation and a significant drop in current account surplus. Analysts say the higher raw materials prices reflect growing consumption in China and other developing markets and falling global stocks. Affected by the global phenomenon, the country is expected to see a rapid rise in their import prices. This may take a toll on the current account balance and will boost upward pressure of consumer prices.
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