After a rollercoaster ride, commodities show their mettle – by Jon Yeomans (The Telegraph – January 2, 2018)

After the rollercoaster ride of recent years, commodity markets enjoyed a strong year in 2017, with investors and mining companies adjusting to the new normal – and banking the gains.

If 2016 saw a broad recovery in prices from calamitous lows, the year just gone laid the groundwork for what the next half-decade may hold. But which commodities bounced back the strongest in 2017?

“We’ve been in a bull market for base metals for quite some time,” says Dr Guy Wolf, head of market analytics at broker Marex Spectron. “But it will be a long, shallow bull market.”

The crisis of 2014, which saw metal prices crater – and with them the profits of the world’s biggest miners – was driven by a slump in demand from China, the largest consumer of raw materials. Worries about China’s ability to sustain its phenomenal growth, amid fears it could see a “hard landing”, arrived at just the same time that plentiful supply from new mines was coming onto the market.

Since then, fears around China have receded. While its growth has levelled off – from 14pc annual growth in 2007 to 6.9pc this year – the fact is that China’s economy is very much greater than it was a decade ago. “China has managed so far to avoid a hard landing,” says Ole Hansen, head of commodity strategy at Saxo Bank.

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