What factors influence the price of minerals?

Prices for minerals are influenced by a number of factors and often experience significant fluctuations. The cyclical nature of mineral prices affects the global economy and has a significant impact on producers, consumers, and investors.

Below are some of these factors:

Global Economic Health: The price of precious metals is closely tied to the health of the global economy. This is because, in times of economic growth, people tend to invest more in stocks, shares and other assets which some may class as riskier, which can result in a decrease in precious metal investments. How ever, in times of economic downturn, the price of minerals increases due to high demand(Six Key Factors Influencing Precious Metal Prices Current Trends and Future Outlook, n.d.).
Cost of extraction: It includes expenses for maintaining mining operations such as construction and equipment of mining facilities. A high extraction cost leads to high price and vice-versa.
Supply and demand: Supply reflects the quantity of minerals available for sale, while demand reflects the quantity of minerals that consumers are willing to purchase at a certain price. Supply depends on factors like extraction, production, and availability. On the other hand, demand depends on energy needs, industrial production, and other sectors of the economy. The interaction between supply and demand shapes the market price for minerals. If demand exceeds supply, prices typically increase as consumers are willing to pay higher prices to secure scarce resources.
Geopolitical factors: the geographic location of mineral deposits has a significant impact on their price since minerals found in politically stable regions with accessible transportation routes leads to low mineral cost and vice-versa(Avtor, 2023).