Further support for commodity prices in 2023
Further support for commodity prices in 2023

24 November 2022 – Commodity prices receive further support in 2023. No sign of recession in Germany so far. And is the proposal for a green label for the German steel industry really so clean?

Further support for commodity prices in 2023

Analysts at investment advisor Goldman Sachs see positive signals for commodities in 2023, due to the good outlook for the global economy. In particular, the further opening of China should have a significant positive impact on demand and prices, according to analysts.

Germany: no recession so far

Sentiment indicators are ultimately only opinions that, like so many surveys and statistics, can be steered to desired results with the right questioning technique.

Are surveys really representative?

For if you state that you send a questionnaire to a certain number of companies (representative quantity) and the results are ultimately based on 85% of the responses received, this does not mean that a representative quantity of responses was received. The Purchasing Managers’ Index is silent on the actual number of responses.

No recession so far

According to Deutsche Bank, the S&P Purchasing Managers’ Index for Germany has missed the mark several times since February 2022 and the feared recession in the German economy has so far failed to materialise. Moreover, German industry is increasingly recovering, according to Deutsche Bank.

When will there be a real seal of approval for green steel?

So far, green or CO2-reduced steel is purely a matter of interpretation by the respective manufacturers. A seal or a label system for green steel would be a good idea. So far, however, there is a lack of impetus from governments.

Attempt at a label system

The German steel industry and its association, the Wirtschaftsvereinigung Stahl, have now made an attempt to introduce a label system for green steel. However, this is only for the German steel industry. There seems to be nothing yet at the European level.

Consideration so far only for hot-rolled steel

Whether this system is really viable remains to be seen. So far it only considers hot-rolled steel and excludes crude steel. In addition, Scope 3 emissions are only taken into account according to the cradle-to-gate principle, which could conceal the real CO2 emissions.

Perhaps a look at the organic regulations of the European Union and Germany will help to find a real approach to green steel.

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