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Metal price on the crazy rise

2016-12-19 16:35:51 admin 9

Recently, most of us are very impressed by the rapid increasing of Metal prices, which have been going up by 15% to 30% in last three months espcial after October. Apparently, most factories and manufacturers are not ready for the unexpectalbe change and are suffering from this problem since metals are so important and take a very high rate of their cost.

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For the last 2 months , most of my suppliers have sent me emails informing that the prices of their raw materials have been increasing significantly, so they have no alternative but to slightly increase their prices. According to LME(London Metal Exchange). The price of COPPER has increased from 4560USD per Tonne in October to 5674USD per Tonne at the end of November, nearly 25% rise in two months; the priceof ALUMINUM has increased from 1540USD per Tonne in October to 1760 USD per Tonne at the end of November, nearly 15% rise in two months. For more info, please visit LME office website www.lme.com.

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There are several reasons why the prices going up?

On the demand Side

The world economy is still recovering , The Chinese economy is slowing down and the Chinese winter ( known for low demand de commodities ) which usually lasts through February , may keep commodity supply weak The Chinese RMB had lost 10% of its value against the USD dollars during the last 14months , makes the import less attractive.Traditionally , the buying spree across commodities does not continue into December as consumers stock ahead of the holiday at the end of January the Chinese new year.

On the Supply Side

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With demand picture and The surge of commodity imports , this is a possibility of inventory accumulation , which may put pressure on the prices to go down in the next coming months.

The debate dividing the market is whether this growth can be sustained into next year, or will be going back to the downside. There is no real reason for this rally in commodities .Therefore that leads many analysts to thinks that high prices are driven by speculation because they haven't seen any real support from the demand side. The commodity prices in china were beaten up for last two years , and maybe some traders have seen a buying opportunity for short term gain..


Visit Steelhome.cn to stay up to date with the prices of raw material .

The Chinese government is already stepping in to fight speculative trading in the commodity exchanges in Dalian , Zhengzhou and Shanghaiby raising transaction charges.

What' s the impact on LED industry?

Matels are very vital for LED industry. As we know, LED chips are made up of copper, LED heatsinks are composed of aluminum or copper, LED lights housings are consist of aluminum, besides, aluminum and copper are main material of PCB. So the rise of metal prices have such strong impact on LED industry, especial for high-class quality LED products suppliers and manufacturers.