Commodity Super-Cycle and Decline – Page 5

Long-term boom for commodity prices seen ahead – by David Berman (Globe and Mail – April 13, 2021)

April 14, 2021

https://www.theglobeandmail.com/

A recent pause in commodity prices hasn’t blunted the view from some observers that we are at the beginning of a multiyear commodities supercycle, where demand outpaces supply and prices rise to new heights.

Copper, in particular, is the favourite play here, given its status as the metal most associated with global efforts to curb carbon emissions through the rollout of renewable energy, efficient buildings and electric vehicles.

But tremendous economic stimulus and many commodity producers’ cutbacks on development costs over the past decade could push up prices for other base metals as well.

Biden’s proposed $2-trillion stimulus will spill over into Canada — but it could also hurt our competitiveness – by Gabriel Friedman (Financial Post – April 3, 2021)

April 7, 2021

https://financialpost.com/

This week, U.S. President Joe Biden travelled to Pittsburgh, Penn., a rust belt steel town with an emerging tech sector, to unveil ‘The American Jobs Plan,’ which he characterized as the greatest opportunity to transform the economy in at least a generation.

With US$2 trillion in proposed spending over eight years, the plan lays out a roadmap to address climate change through emission reduction and investment in aging infrastructure, and it has delighted many in Canada who believe a large stimulus in the U.S. will carry spillover benefits for this country’s economy.

Biden’s proposal includes roughly US$1 trillion in spending over the next eight years just in areas related to a low-carbon economy — including charging stations for electric vehicles, new public rail and transit projects, grid modernization, clean energy manufacturing and research and development.

China’s Commodities Binge Makes America’s Future More Expensive – by Jack Farchy, Alfred Cang and Mark Burton (Bloomberg News – April 1, 2021)

April 1, 2021

https://www.bloomberg.com/

The U.S. spending plan faces a big problem: Beijing got to all the raw materials first.

Fresh from passing a $1.9 trillion stimulus bill, U.S. President Joe Biden on Wednesday turned his attention to a similarly vast package of investment in infrastructure, and that means the U.S. is going to need more commodities. There’s just one problem: China.

America requires steel, cement, and tarmacadam for roads and bridges, and cobalt, lithium, and rare earths for batteries. Above all, it needs copper—and lots of it.

Copper will go into the electric vehicles that President Biden has said he’ll buy for the government fleet, in the charging stations to power them, and in the cables connecting new wind turbines and solar farms to the grid.

This commodity boom could quickly turn to bust – but a better opportunity awaits – by David Rosenberg (Financial Post – February 25, 2021)

March 1, 2021

https://financialpost.com/

China’s dominance, India’s rise and the shift towards green energy bodes well for some commodities

The recent run-up in commodity prices has unsurprisingly spurred discussions about a newly emerging commodity supercycle. It’s clear that we are in the midst of a supply-constraint led boom in this space, but this does not portend a long-term trend or decades-long supercycle ahead.

Indeed, any outlook of the sort that depends on a Roaring Twenties narrative, where global economies surge back to life once the pandemic is behind us, needs to be taken with a huge grain of salt.

However, we do see secular changes arising such as China’s increasing dominance and India’s rise (part of our “Go East” theme), as well as the global shift towards electrification creating opportunities for investors within a certain class of rising commodities.

Commodities supercycle or bull rally? Analysts point to silver as the one to watch – by Anna Golubova (Kitco News – February 26, 2021)

February 26, 2021

https://www.kitco.com/

(Kitco News) – Are we on the verge of another commodity supercycle or just a post-pandemic rally after some major supply restrictions? A number of firms favor “supercycle,” and JPMorgan said signs of inflation support the view.

“We believe that the new commodity upswing, and in particular oil upcycle, has started,” the JPMorgan analysts said. “The tide on yields and inflation is turning.”

The idea is that the new supercycle will be driven by the post-pandemic recovery, inflation, accommodative monetary and fiscal policies, a deteriorating U.S. dollar, and a global fight against climate change.

Supercharged commodity boom: Definitely. Supercycle? Not exactly – by Mark Burton, Thomas Biesheuvel and Alex Longley (Bloomberg/Yahoo Finance – February 23, 2021)

February 23, 2021

https://ca.finance.yahoo.com/

A surge in commodity prices has Wall Street banks gearing up for the arrival of a new supercycle, but underlying dynamics suggest it isn’t going to be a repeat of the epic China-led boom at the start of this century.

Copper heading for new all-time highs, surging agricultural markets and oil prices back at pre-Covid levels are driving excited talk as economies, juiced by massive stimulus, rev up after Covid-19 lockdowns.

The theory is that this could be just the start of a years-long rally in demand for raw materials across the board.

BHP’s outlook, record dividend fuel supercycle talk – by Cecilia Jamasmie (Mining.com – February 16, 2021)

February 16, 2021

https://www.mining.com/

BHP (ASX, LON, NYSE: BHP) reinforced talks of a new supercycle on Tuesday by rewarding investors with a record $5.1 billion first-half dividend and forecasting a “very constructive” outlook for the commodities market fundamentals, as the global economy begins to rebound from covid-19.

The world’s largest miner said first-half profit jumped by 16%, hitting a seven-year high, as demand from top metals consumer China helped boosting iron ore prices by 70% in 2020, to a recent nine-year high of $176.90 a tonne.

That is well above the cost of roughly $10 to $20 a tonne most global miners spend in extracting the steel-making commodity, according to WSJ.com estimations.

Canadian economy gets jolt from surging commodities – by Matt Lundy (Globe and Mail – February 15, 2021)

February 16, 2021

https://www.theglobeandmail.com/

The Canadian economy is getting a timely assist this winter from a broad-based upswing in commodity prices, helping to soften the blow from the second wave of COVID-19 and spurring talk of another “super cycle” in key resources.

From lumber to iron ore, soybeans to canola, just about everything has clawed back to prepandemic prices or multiyear highs. Excluding energy, a Bank of Canada commodity price index has surged 36 per cent from April, taking it close to a record.

Even oil is looking up. Ten months after it tumbled into negative pricing, the U.S. benchmark has rallied to around US$60 a barrel, just as production climbs in Alberta.

‘The tide is turning’ on inflation, kicking off the 5th commodity supercycle, says JPMorgan – by Anna Golubova (Kitco News – February 11, 2021)

February 11, 2021

https://www.kitco.com/

(Kitco News) Signs of inflation are already here, and so is the new commodity supercycle, JPMorgan said in a note.

“We believe that the new commodity upswing, and in particular oil upcycle, has started,” the JPMorgan analysts said. “The tide on yields and inflation is turning.”

The new supercycle will be driven by the post-pandemic recovery, inflation, accommodative monetary and fiscal policies, a deteriorating U.S. dollar, and a global fight against climate change, the note said.

Another commodity supercycle is coming — this time driven by renewable energy and EVs – by Peter Tertzakian (Financial Post – January 29, 2021)

January 29, 2021

https://financialpost.com/

Peter Tertzakian: The transition to an electrified clean energy economy is going to result in a monumental draw on metals and minerals from the earth’s crust

Like many in the energy business, I marvel at how fast the cost of producing renewable power, LED light bulbs and lithium-ion batteries has fallen over the past decade. Depending on what’s being measured, some costs are down by more than 90 per cent.

Should we assume these downward-trending cost curves are sustainable? And will this type of cost reduction be applicable to other emerging clean energy devices?

Based on advances in technology and more efficient manufacturing processes, the short answer is a qualified yes. Yet, we shouldn’t be blinded by the glow of the new economy — things like data science, process engineering, robotics and advanced materials — which, to date, have been the principal drivers for achieving these cost reductions.

Revenge of the miners – by Nelson Bennett (Business In Vancouver – January 18, 2021)

January 19, 2021

https://biv.com/

Long scorned as environmental villains, miners now saviours in green transition: Robert Friedland

One year from now, when the next Association of Mineral Exploration (AME) Roundup conference is held, mining legend Robert Friedland expects the backdrop will be a world in economic recovery and the beginning of what many commodities analysts predict will be a mining supercycle.

And that will be very good indeed for miners, junior exploration companies, and for Vancouver, which is a global mine financing hub.

“A year from now, when we have the next Roundup, I’m hoping we see a vibrant, recovering world economy,” Friedland said in a keynote speech at the opening Monday of the first-ever virtual Roundup conference.

Robert Friedland opens Remote Roundup: ‘In our world, the geologists are the gods’ – by Alisha Hiyate (Canadian Mining Journal – January 18, 2021)

January 19, 2021

http://www.canadianminingjournal.com/

The Association for Mineral Exploration opened up its Remote Roundup – its first virtual conference in the event’s 38-year history – with special guest speakers that included a keynote talk from Robert Friedland, founder and executive co-chairman of Ivanhoe Mines.

Speaking from Singapore, where the mining entrepreneur (and previously frequent traveller) noted he has been “stuck” for the past 10 months, Friedland’s address touched on a number of hot topics, including ESG, increasing demand for battery minerals for the green economy, and the importance of junior mining companies.

Starting with the current state of affairs for miners, Friedland noted that investors have largely abandoned mining and flocked to the tech space, notably investments in broadband internet, the cloud, and other disruptive technologies over the the past 20 years.

Goldman proclaims the dawn of a new commodity supercycle – by Andy Home (Financial Post – January 5, 2021)

January 8, 2021

https://financialpost.com/

LONDON — Will COVID-19 kick-start a new commodities supercycle? Goldman Sachs thinks so.

While last year’s strong rebound in many commodity prices might be viewed as a “V-shaped vaccine recovery,” the bank contends it is just “the beginning of a much longer structural bull market for commodities.”

“Looking at the 2020s, we believe that similar structural forces to those which drove commodities in the 2000s could be at play,” Goldman argues. (“2021 Commodities Outlook: REVing up a structural bull market,” Nov. 18, 2020)

‘Green stimulus packages’ key driver for base metal demand, says analyst – Staff (Northern Miner – December 9, 2020)

December 10, 2020

https://www.mining.com/

“The path to economic recovery will be long and slow,” says Intl FCStone metals analyst Natalie Scott-Gray.

Demand for base metals outside China is not expected to recover back to 2019 levels until 2022 or 2023 due, in large part, to the impacts of the covid-19 pandemic on the global economy.

Although the U.K. is already administering vaccinations for covid-19 and multiple vaccines are forecast to be approved and distributed by the end of the year, Scott-Gray said, “To reach global herd immunity (when 60-70% of the population are immunized), the earliest dates being suggested are from late spring to December 2021,” she told The Northern Miner in an email.

Mining supercycle talk back as copper, iron ore prices surge to 7-year highs – by Editor (Mining.com – December 1, 2020)

December 2, 2020

https://www.mining.com/

The copper price was trading at its highest since March 2013 on Tuesday after Chinese data showed manufacturing and construction in the world’s second-largest economy was expanding at a pace not seen in a decade.

On the Comex market, copper for delivery in March jumped 2.4% to $3.5215 a pound ($7,764 a tonne) in New York, racking up its fifth straight day of gains. The copper price has advanced 26% year to date after recovering from a dip below $2.00 a pound at the height of the pandemic in March.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $132.13 a tonne on Tuesday. That was the highest level for the steelmaking raw material since January 2014 and brings gains for 2020 to over 43%.