My friends over at Denali Consulting had another newsletter last month. This one discussed the current supply markets and financial crisis. It concludes with:

Supply markets and commodities are reacting similarly to the financial markets, which are expecting this financial turmoil to result in a deepening and protracted recession. This economic downturn will most likely be international in scope and last throughout 2009 and into 2010.

As such, demand for a wide array of goods is expected to fall, along with production volumes. This will most likely lead to a downturn in base commodity prices. So, with the exception of utility infrastructure commodities, most other manufactured products will see an easing of prices over the next 18 months. Utility infrastructure project demand is still strong and will continue to be going forward, albeit at a more elastic rate, and pronounced market easing is not expected until the 2010 to 2011 timeframe.

This consistent with what we are seeing in reverse auctions and multi round bids, right now. Commodity prices are dropping everywhere and buyers are looking for new market prices in areas wherever they can find savings.

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