For months, economists have debated why the price of so many commodities — from aluminum, iron ore and copper to natural gas and lumber — have been so volatile: Are these the first signs of structural shifts in supply chains related to the energy transition, or just temporary blips?
There’s consensus on a few points: The pandemic, by halting and then restarting supply chains, threw supply and demand fundamentals out of whack, and pushed many commodity prices up.
A shift in consumer spending away from services, like air travel and dining out, towards durable goods like exercise machines and home renovations, also increased demand for metals and wood products, that contributed to further price increases.
It ties into a larger discussion about whether recent inflation — which Statistics Canada clocked at 4.1 per cent in August, the highest level since 2003 — is transitory or likely to endure for a longer period.
For the rest of this article: https://financialpost.com/commodities/energy/oil-gas/a-wild-time-why-commodities-are-in-a-supercycle-of-volatility