What Caused the Slack Demand for Metals after 1974?

Document Type

Article

Publication Date

12-1988

Department

College of Business

Abstract

This paper explores the general reasons for the sudden decline in the growth of world metal demand which began after 1974 and continues to impact the metal industries. For all of the eight metals studied, except aluminium, the dominant cause of this atrophy in demand is the stagnation in total world economic growth, which has caused reduced demand for all goods and services. In addition, consumer preferences have shifted away from metal-intensive goods, further reducing the need for metals. However, materials substitutions and manufacturing technologies have continued to evolve towards lower use of metal in each product at much the same rate after 1974 as before. Therefore, these aspects do not explain the sudden shortfall after 1974 except in the case of aluminium which experienced a dramatic change during the energy crisis years.

Publisher's Statement

© 1988

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