Balkans.com:As a leading research and consulting firm, Frost & Sullivan has reported extensively on many industries including metals and mining. Can you please give our readers an overview on the global metal and mining market, specifically for the Balkan region?
Monika Nowotnik: The global market for metals and mining has faced strong rebound in 2010, following the global economic crisis of 2008 and 2009. However, 2011 has shown moderate downturn indicating that the world economy has still not overcome the consequences of the crisis. The United States and some countries of the European Union, such as Greece, Spain or Portugal, are strongly indebted. This economic situation of the developed economies has caused a feeling of global financial insecurity. Many of the major global mining investment projects have been postponed or suspended due to lack of liquidity of mining companies. The effects of the downturn also affected the metal industries in countries like Russia, which were finally supported by Government funds. This has also hampered the growth of the Balkan or the South African mining industries. Only the Chinese mining industry still shows positive signs with increasing investment from its strong domestic economy.
Balkans.com: Prices of metals have recently increased to record levels; why is this occurring and is it an appropriate time to invest in metals and mining?
Monika Nowotnik: As of 2011, the index of metal prices has increased to reach the highest levels in comparison to the previous years. This was caused mainly because of excess demand over limited supply of metals globally. The supply is limited due to the steady depletion of the natural resources, increasing complexity of extraction and recent turmoils in the African and Asian countries. On the other hand, the global demand is increasing because of the fast developing emerging economies, especially China, India, and Brazil. The global demand for metals is further expected to rise due to the recent cataclysm in Japan and the need to rebuild the Japanese industry. The popularity of purchasing metals as hedge assets in times of economic insecurity and volatile fluctuations of currencies is also significantly growing.
