In this report, MAPI Economic Consultant Jeremy Leonard examines recent trends in prices of industrial nonferrous metals and crude oil and provides forecasts through the end of 2012. After a sharp correction during the Great Recession, prices of industrial metals and crude oil have largely returned to pre-recession levels or higher. The global economic recovery, however, has lost considerable momentum. Across the G7 nations, GDP growth decelerated from 3 percent to 1.4 percent and industrial production growth declined by a factor of three. China is also increasingly at risk of an economic slowdown.

These macroeconomic signals suggest softer demand for commodities in the remainder of 2012; prices for copper, aluminum, and zinc are predicted to decline by varying degrees, while nickel is forecast to remain stable. Crude oil prices are also forecast to ease, but tensions related to Iran have added uncertainty to the outlook.