NDINAVHUSHAVHELO RABALI: Talk of a commodities supercycle is fanciful
Commodity investors beware, the duration of the recent upswing is unlikely to last a decade
The CRB index, which measures the average price of agricultural, industrial, energy and precious metal commodities, is up by roughly 50% over the past 12 months. As the global economy reopened, inventory constraints pushed commodity prices higher, owing primarily to increased stockpiling by China.
Simultaneously, supply was hard hit by Covid-19 related restrictions. This temporary imbalance in supply-demand and the anticipated increase in infrastructure investment by big governments such as the US fuelled talk that we are entering into a commodities price supercycle. This thinking may be far-fetched considering the definition of a supercycle, as well as the factors that trigger it...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.