Amid the disappointing performance of the index of core industries (ICI) in July 2017, at 2.4% year on year growth, the steel industry stands out with an outlier growth of 9.2%. In fact, steel has shown a robust growth of 10.9% on average in the past 12 months, which is far higher than average ICI growth of 3.6%.
China has long been the marginal driver of demand for a wide array of commodities. In an attempt to understand the recent rise in the price of industrial metals, the strength of Chinese demand is a key factor. The picture is mixed.
Recently, the Reserve Bank of India (RBI) revisited its inflation forecasts, sharply downwards amid many questions on their accuracy. It might have to do the same for its growth forecasts, though a small revision has been done already.
Does the rising price of industrial metals herald the beginning of the next commodity super-cycle? Industrial Metals have been increasing sharply during the last quarter. Global economic growth remains muted but is accelerating in emerging markets. In addition, capital expenditure in the mining sector has been weak leading to supply constraints. A short-term cyclical recovery seems more likely than the beginning of a new super-cycle.
Africa is standing on the cusp of much-awaited change, its metamorphosis being driven largely by civil society. Whether domiciled within the continent or spread out in diaspora, young Africans across the world are developing a new-found love for their heritage, motherland and its blossoming yet somewhat troubled evolution.
Since the Federal Reserve raised U.S. rates for the third time in six months, Asian central banks have not blinked. Unlike in past Fed tightening cycles, Asia is much more reliant on China, Japan, South Korea than on the United States.
Bahrain, Saudi Arabia, the United Arab Emirates (UAE) and Egypt severed relations with Doha last week, accusing it of supporting Islamist militants and their arch-enemy Iran. Several other countries later followed suit. The recent dispute between Qatar and some of its neighbours is the most serious dispute among them in years, and has the potential to further destabilise an already turbulent region. But the crisis also presents a potential opportunity.