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Most metals prices peaked in March 2008 (nickel and zinc prices peaked much earlier), but the collapse of economic growth and with it demand for many metals caused prices to drop much further into 2009 before rebounding somewhat in recent months on strong import growth into China, mainly due to re-stocking.
Metals prices are expected to be relatively stable over the remainder of 2009, with most of the 41 percent decline projected between 2008 and 2009 having already occurred.
As a result, spending on new extraction projects has been slashed, and output is declining because lower prices have rendered many difficult-to-exploit mines uncompetitive.
The downturn has led to a buildup of spare capacity, which can be brought back into production relatively easily, and should keep prices from rising by much when demand recovers.
However, because prices have been just covering exploitation costs, no further major declines in metals prices are expected, with the possible exception of copper, where prices remain above the marginal cost of production.
Over the forecast period, metal prices are expected to remain broadly stable—rising in line with inflation in 2010 as demand recovers.
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