What supercycle? Commodities bulls take a bruising this month

Economic reopenings have driven a surge in commodities prices this year, but the last two weeks have seen a slump take hold, with some raw materials seeing gains for the year now totally wiped out.

The commodities boom has taken a knock this month, and while there are many reasons to still bet on a so-called supercyle, it’s unlikely to be plain sailing. Vast amounts of stimulus, economies reopening from the pandemic and strong Chinese demand have driven a surge in raw-material prices this year, some to record highs. Yet they’ve slumped in the past two weeks – with some wiping out gains for the year – on a more hawkish U.S. monetary policy tone, China’s bid to cool inflation pressures and better weather for crops. While that’s blown away some of the speculative froth from the market, the big question is whether the latest commodities bull run has passed its peak or is just taking a breather.