(Bloomberg) -- The broader economic factors that have been fueling the post-pandemic commodity boom are fading, says Fitch Ratings Inc.
The pace of global industrial production growth is falling “quite swiftly” after an impressive spike in demand for durable goods during lockdowns, the rating company said Friday in a note to clients. China’s housing market is cooling, and credit flows are weakening, all weighing on demand for raw materials including iron ore, Fitch said.
What’s more, the U.S. dollar has strengthened as the Federal Reserve should soon start tapering its massive bond purchases, making everything priced in the greenback -- from oil and natural gas to soybean and copper -- more expensive in other currencies.
That has led to a more divergent pattern in commodity price moves, with energy prices continuing to surge while some metals prices are falling, Fitch said.
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