The value of the $2.9 trillion US market for metal-bearing minerals rose sharply, to $5.3 trillion in the third quarter of this year, as US producers continue to ramp up production and China struggles to curb a surge in pollution.
But the increase is only part of a global demand slowdown.
The United States, Canada and Australia also cut production, while Brazil, India and Mexico boosted output.
In the second quarter, the United States’ $2 billion of metal production fell 5.2%, the US-based Commodity Futures Trading Commission reported on Friday.
That was the biggest drop since June 2014, when China’s economic slowdown led to a massive jump in metal prices.
In fact, since January, prices for metals have fallen an average of 3.9% annually, according to the CFS.
The sharp fall in US production is a reflection of an oversupply that’s pushing up prices, according a report released this week by the Committee for a Responsible Federal Budget.
The US metal market is also the biggest driver of economic growth in the world.
The US metal industry, the largest industrial group in the US, accounts for 14% of total GDP and employs nearly 17 million people, according the US Commerce Department.
For years, the US government has used a program called the Commodities Futures Modernization Act to allow the metal industry to produce at a lower cost than traditional mining and refining businesses.
The program has helped the economy by making it easier for manufacturers to import components from overseas.
The Federal Reserve has used the program to buy up US government bonds in an effort to keep interest rates low, and the Treasury Department has also borrowed to help prop up the economy through the downturn.
The government has spent more than $1 trillion to prop up US production.
The price of steel has also plummeted since the start of the downturn, from about $25 a metric ton in 2010 to about $5 a ton in 2015.
“The government has put a lot of money into the metal market, and it has helped to prop it up,” said Mark Muro, head of the metals research at investment bank UBS.
“That’s what is driving the price.”
However, that cash infusion has had a downside, as demand for metals has dropped, according as the US metals industry has lost nearly 10% of its value since the middle of last year.
That’s despite the fact that the government’s Commodification Assistance Programs are still providing financial support to the industry.
“The Commodifying Assistance Program has been a huge boon to the metal sector,” said James Fuchs, director of the US Department of Commerce’s Office of International Trade and Trade Economics.
“It’s been helping the industry make some of the largest purchases in the metals market, which has helped them make more money out of their business.”
But that cash injection has also led to higher prices for precious metals.
For example, the price of platinum dropped nearly 40% in 2016, according data from the National Mining Association.