Is This The End Of The Commodities Super-Cycle?
By Stuart Burns
The end of the commodities super-cycle has been predicted before — but could this time really be different? Many thought the collapse in prices after the Lehman Brothers crisis was the end of the boom that started earlier in the decade, but prices bounced swiftly back, some to near-record or even record highs. Two factors have driven the volatility and significance of commodity prices in recent years. First, one country has become a disproportionately large consumer, tying the fortunes of nearly all commodities to that country — no prizes for guessing which one. China accounts for as much as half the world’s demand for some commodities, such as iron ore. It has the power to shape almost single-handedly the direction of the commodities super-cycle, and by extension the price of iron ore and others. The other factor is the value of commodities. As an FT article pointsComplete Story »