Is the global economy slowing? We look at four charts – lumber prices, iron ore prices, aluminium prices and the Baltic Dry index.
Lumber
Lumber or Timber, a key component for construction is down 35% over the past year.
Iron Ore
Iron Ore, a key component in the production of Steel is up 44% over the past year. Steel is used in production of various industrial goods.
Aluminium
Aluminium which has a wide variety of uses and is used in the manufacture of cans to window frames is down 15% over the past year.
Baltic Dry
The Baltic Dry Index is a trade indicator that measures shipping prices of major raw materials and is often seen as a global growth indicator. The index is based on a daily survey of agents all over the world. The Baltic Dry Index is down 25% over the past year.
Global Economy slowing? Oil (Crude and Brent) and natural gas prices are largely unchanged over the past year. Most agricultural commodities prices are largely down over the past year. Other than iron ore, most other industrial commodities are down over the past year as well, and the fall is significant. The signs of a slowing economy are definitely there, just a warning sign though, we saw exactly the same thing happening in 2016 but commodity prices recovered.