Which Commodities Might Have a “Supercycle” Ahead?

Asian Metals Symposium held an expert survey at their online metal seminar on Tuesday. The participants were discussing whether the commodity market would experience a “supercycle” in the next few years or not.

Global demand is picking up as some economies rebounded from the COVID-19 pandemic. Trillions of dollars of stimulus injections of large amounts of liquidity have contributed to historical prices for some metals.

Some global banks predict that commodities will go through a multi-year supercycle. The shortage and strong demand in the renewable energy and electric vehicle sectors are likely to drive the supercycle.

A poll conducted on Tuesday at the Asian Metals Symposium of the London Metal Exchange showed that only 6.49% believed that “supercycle” is an accurate description of the commodity market trend in the next 12 months. While 33.77% of people voted for liquidity and inflation, China’s demand grew by 22.08%, and developed economies rebounded.

Copper, Nickel, and Lithium Will Benefit the Most, Experts Say

All experts agree that the energy transition trend that serves the carbon-neutral goals of leading economies will help certain metals, especially copper, nickel, and lithium.

Another poll showed that copper is the metal that will benefit the most in the next 6-12 months, accounting for 52.69% of votes, lithium with 16.13% for lithium, 13.98% for aluminum, and 8.6% for silver. Nickel is 5.38%, and cobalt is only 3.23%.

With the support of infrastructure demand and the rapidly growing new energy vehicle market, copper will be a dark horse.

New energy vehicles require 80 kilograms of copper, while internal combustion engine vehicles require 23 kilograms. Investment in renewable energy for charging, wiring, and power grids will also generate demand for copper.

Lithium, nickel, and low-carbon aluminum will also be sought after in the energy transition trend.

Copper might have a small amount of surplus in 2022-2023. It can be due to supply pick-ups and a slight slowdown in demand growth in traditional industries. However, in the long run, the energy transition will take over.