• Once again, movements in commodity prices have been dominated by events in China and growing speculation over the timed withdrawal of QE stimulus by the US Fed. With market participants on the sidelines throughout most of February due to many of the Asian economies celebrating the Lunar New Year, prices of most of the commodities were relatively steady over the first half of the month, although most industrial commodities prices have pulled back a little more recently.
• Iron ore prices have remained somewhat more resilient than expected, remaining above $150 per tonne, although some of the support has come from concerns over supply disruptions. Temporary factors underlying the price rally should soon work out of the market causing prices to steadily ease over coming months.
• With improving economic conditions causing a shift in asset holding preferences towards riskier assets and away from gold, the price of gold has experienced its longest run of monthly consecutive price falls in 16 years.
• Concerns over the likely impact the recently imposed ‘sequester’ will have on the US economy as well as future impacts of fiscal resolutions will continue to influence markets over coming months. Other factors, some of which are temporary in nature (eg. cold weather, floods and cyclones), are likely to boost near-term prices. In the medium to longer term, however, prices in most markets will generally ease as production begins to ramp up.

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• Commodity Update – Minerals and Energy February 2013 (PDF 464 KB)