Industrial materials prices continue to decline with hopes of recovery in second half of 2023: Report
New Delhi: Prices of industrial materials have been on a decline for a while now, raising concerns for various sectors, but analysts foresee a potential rebound in the latter half of 2023, according to a report by S&P Global Market Intelligence. The Materials Price Index (MPI) compiled by S&P Global Market Intelligence reveals a 2.8% sequential decline in industrial materials prices during June . The second quarter of 2023 recorded a staggering 32% year-over-year (YoY) slump.
Among the sub-components, energy prices experienced the most significant decline, dropping 17%. Ferrous metals also faced a considerable 11% fall, contributing to the overall bearish trend in the industrial materials market. The MPI data indicates that prices saw an increase in merely eight weeks during the first half of 2023, underscoring the challenges faced by the industry.
Crude prices have been severely impacted by robust non-OPEC+ supply growth and sluggish global demand, resulting in frequent downward revisions in forecasts. Experts predict a moderate average of $81 per barrel for Brent prices during the third and fourth quarters, as the second half of the year is expected to see a rise in prices. Notably, non-OPEC+ is projected to observe a total liquid supply growth of 2.2 million barrels per day, nearly aligning with the projected demand growth outlook of 2.3 million barrels per day.
It is pertinent to note that OPEC+ production cuts over the past year, estimated to be 2.5 million barrels per day fewer than October 2022, appear to be aimed at mitigating oversupply rather than artificially inflating prices. However, the decline of nearly $30 per barrel during this period has raised concerns within the industry. Despite members of OPEC+
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