ID :
186112
Thu, 06/02/2011 - 15:33
Auther :
Shortlink :
https://oananews.org//node/186112
The shortlink copeid
China plays large role in driving commodity prices up: S&P
HONG KONG, June 2 (Yonhap) -- China has been playing a large role in driving the global commodity prices as the world's No. 2 economy emerged to become of the leading consumers of commodities, Standard & Poor's Ratings Services (S&P) said Thursday.
"Among emerging economies, we believe China -- given the combination of the size of its economy and the steep slope of its growth trajectory -- has had a far more significant role in driving appreciation of commodities prices than any other country," credit analyst Scott Sprinzen at the global credit rating agency said in a report.
S&P published earlier on Thursday the report warning of the potential risk of China's large and growing presence in commodities markets.
Global commodities prices have been at or near record levels since earlier this year, and subsequently subsiding only modestly. Key commodities prices are estimated to have surged by 30 percent vis-a-vis mid-2010, with crude oil jumping 40 percent.
The credit appraiser said it is concerned that the current situation represents an unsustainable bubble, subject to a sudden correction.
"Indeed, the modest subsidence of prices over the past two months is partly attributable to market expectations of slower growth in China," Sprinzen said.
The analyst warned that a significant deceleration or downturn in China and other emerging economies could ultimately cause a rupture, if current market conditions in commodities "do represent a bubble."
While S&P predicted that China will sustain high growth rates over the next few years, it said the growth will not be as high as in the recent past and could slow more markedly at some point.
"We believe that any sudden and severe economic deceleration in China would cause distress in the commodities markets, forcing prices downward and leaving companies with excess supply and production capacity that the more-developed economies couldn't pick up," Sprinzen said.
Rising international energy and commodities prices have exerted a negative influence on production costs and fuel inflationary pressure across the world.
The April report by the state-run Korea Institute for Industrial Economics and Trade (KIET) said that if crude oil, natural gas and other raw materials prices go up by an average of 10 percent, South Korea's overall industrial production costs will rise 1.2 percent.
"Among emerging economies, we believe China -- given the combination of the size of its economy and the steep slope of its growth trajectory -- has had a far more significant role in driving appreciation of commodities prices than any other country," credit analyst Scott Sprinzen at the global credit rating agency said in a report.
S&P published earlier on Thursday the report warning of the potential risk of China's large and growing presence in commodities markets.
Global commodities prices have been at or near record levels since earlier this year, and subsequently subsiding only modestly. Key commodities prices are estimated to have surged by 30 percent vis-a-vis mid-2010, with crude oil jumping 40 percent.
The credit appraiser said it is concerned that the current situation represents an unsustainable bubble, subject to a sudden correction.
"Indeed, the modest subsidence of prices over the past two months is partly attributable to market expectations of slower growth in China," Sprinzen said.
The analyst warned that a significant deceleration or downturn in China and other emerging economies could ultimately cause a rupture, if current market conditions in commodities "do represent a bubble."
While S&P predicted that China will sustain high growth rates over the next few years, it said the growth will not be as high as in the recent past and could slow more markedly at some point.
"We believe that any sudden and severe economic deceleration in China would cause distress in the commodities markets, forcing prices downward and leaving companies with excess supply and production capacity that the more-developed economies couldn't pick up," Sprinzen said.
Rising international energy and commodities prices have exerted a negative influence on production costs and fuel inflationary pressure across the world.
The April report by the state-run Korea Institute for Industrial Economics and Trade (KIET) said that if crude oil, natural gas and other raw materials prices go up by an average of 10 percent, South Korea's overall industrial production costs will rise 1.2 percent.
