The United States is becoming a global standout for rising commodity demand, which is likely a sign of underlying economic growth, the Financial Times reports.
As the U.S. economy is picking up steam, it is pushing up demand for everything from copper to corn and crude oil, according to commodities traders interviewed by the Times.
“The U.S. is doing very nicely. Demand is up,” said one New York commodities executive.
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Another commodities executive in Switzerland agreed. “People are not realizing it, but it is just happening — cheap energy, low interest rates … it is all propelling the U.S. economy.”
The heads of major commodities trading houses believe raw material demand appears to be more of a “bright spot” at the moment in the United States than in the boom countries of China, India or Brazil.
The International Energy Agency reported that recent U.S. oil demand has “surprised on the upside,” adding that “diminished pessimism has emerged in recent months.”
U.S. consumption of copper, aluminum and steel is “up significantly” amid signs of a rebound in the housing construction sector, and the price of U.S. lumber is near an eight-year high, according to the Times.
Renewed economic vigor is also feeding into the agricultural sector, the Times reported, noting that the Department of Agriculture recently revised upward its estimates of domestic corn consumption with increased demand from the livestock and ethanol industries.
Hedge funds have taken the most bullish commodity positions this week since November, as a jump in U.S. housing starts and the first acceleration in Chinese growth since 2010 are putting support under raw materials prices, Bloomberg reported.
Government stimulus measures in Japan may also be putting a floor under commodity prices, according to Reuters.
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