Direction of Raw Material Prices in March

[Asia Economy Reporter Song Hwajeong] Recently, the prices of raw materials have been on the rise, and this trend is expected to continue in March.

According to Samsung Futures on the 1st, last month, non-ferrous metals saw an increase in physical demand due to the Chinese Lunar New Year (Chunjeol) travel restrictions, and the improvement in U.S. manufacturing indicators along with expectations for stimulus measures acted as upward pressure, resulting in a rising trend. Political instability in major non-ferrous metal supplying countries heightened concerns over supply disruptions, leading to an expansion of backwardation in some non-ferrous items and closing with gains.

Although there may be short-term corrections in March, the upward trend is expected to continue. Kim Kwangrae, a researcher at Samsung Futures, said, "Due to the sharp rise in February, some items may experience short-term technical corrections, but expectations for infrastructure investments from the U.S. and China, along with concerns over production disruptions in major ore supplying countries, will further highlight the tight inventory situation." He added, "With the dollar at its lowest level in two years and increased demand for inflation hedging, a moderate upward trend will be maintained."

In March, attention should be paid to the OPEC+ (Organization of the Petroleum Exporting Countries (OPEC) member countries and non-OPEC coalition) meeting regarding oil prices. Last month, international oil prices exceeded $60, reflecting short-term supply disruption concerns due to severe cold waves in the U.S. Researcher Kim said, "There are still many counterforces that make investors feel a significant burden in setting a clear direction, so the price will continue to struggle around $60." He forecasted, "After confirming the results of the OPEC+ meeting, a clearer direction will be shown."