“The recent increases, which follow a summer of soft prices, are as high as 12% and as low as 1%, depending on the kind of product and the location. They reflect cutbacks in China as steel producers there lower output to meet the government’s year-end energy-savings target.”

I invariably use the PINTSWC (Productivity, Indirect taxes, Number of firms Technology, Subsidies, Weather, Costs of production) acronym picked up from this blog when teaching factors which shift supply. Here’s a good example from the WSJ which could be used to explain a further supply shifting factor. It also highlights China’s growing importance in influencing world raw material prices.

The image below shows where the price rises are coming from.