Paul Krugman Has Two Words: Iron Ore
What about those who argue that speculative excess is the only way to explain the speed with which oil prices have risen? Well, I have two words for them: iron ore.
You see, iron ore isn’t traded on a global exchange; its price is set in direct deals between producers and consumers. So there’s no easy way to speculate on ore prices. Yet the price of iron ore, like that of oil, has surged over the past year (see chart above, data here). In particular, the price Chinese steel makers pay to Australian mines has just jumped 96%. This suggests that growing demand from emerging economies, not speculation, is the real story behind rising prices of raw materials, oil included.
~Paul Krugman, NY Times article "Fuels on the Hill"
See related CD post on onions, which are also not traded in futures markets.