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Baltic Dry sounds alert on global growth

Friday, November 20, 2015 - 01:37

Commodities come under huge pressure again and the Baltic Dry Index - seen as a leading economic indicator - hits its lowest level ever. Kirsty Basset reports on the latest alarm bells to ring over the global outlook.

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Commodity prices continue to come under pressure. Copper - seen as a bellwether of the global economy because of its wide industrial use - is near a 6 and a half year low. Partly on concerns that China's 10-1/2 trillion dollar economy doesn't need quite as much of the metal as it used to, as it transitions away from manufacturing led growth towards an economy more driven by services. Adam Chester is from Lloyds Bank. (SOUNDBITE)(English) HEAD OF ECONOMIC RESEARCH AND MARKET STRATEGY, LLOYDS BANK, ADAM CHESTER SAYING: "Clearly there are concerns about the outlook for global growth, particularly in emerging markets, in Asia and Brazil. But also I think there's a broader supply issue. The world is oversupplied with oil in particular and commodities generally at the moment. And that supply glut is weighing on commodity prices and pushing them to new lows." Crude futures have already lost around 60 per cent of their value since 2014 as supply exceeds demand. But that downward momentum could change. (SOUNDBITE) (English) HEAD OF ECONOMIC RESEARCH AND MARKET STRATEGY, LLOYDS BANK, ADAM CHESTER SAYING: "We think oil prices will turn higher into the end of the year and move north over the course of 2016." Adding to the gloom - an index seen as a good reflection of the health of world trade fell to its lowest level on record. The Baltic Dry Index which tracks rates for ships carrying dry bulk commodities - has dropped almost 60 per cent from its peak this year. But one commodity bucking the trend on Friday was zinc. After hitting a 6 year low a day earlier, it surged nearly 6 per cent after Chinese zinc producers agreed to slash production.

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Baltic Dry sounds alert on global growth

Friday, November 20, 2015 - 01:37