Commodity Supercycle Sparks as Copper Mine and Platinum Stock Send Warning Signs
BlackRock's global head of thematic and sector investing, Evy Hambro, has called it a new commodity supercycle. He believes that commodities are entering this cycle due to three forces: AI data-center power demand, a faster electrification build-out, and years of underinvestment in new mines. This means that the supply curve itself is changing, making prices run tight without needing a fresh catalyst.
The evidence supports Hambro's claim. At BHP's Escondida copper mine in Chile, the supervisors' union has rejected the company's final wage offer and urged a strike vote. The mine already produced 3% less copper last fiscal year than the previous year, and guidance for this year points to a further decline.
COMEX platinum stock hit a nine-month low of 179,000 ounces on September 24, with a draw that moved faster than nearly every comparable stretch on record. Copper's own futures curve is pricing a shortage, with a spread between LME's cash price and its three-month contract widening sharply.
Meanwhile, China's Golden Week begins tomorrow, with gold imports already running at a pace unseen since 2017. The holiday traditionally opens the country's peak seasonal gold-buying season, but this year it lands on top of an already-record pace.