Commodity Prices On Track For Their Greatest Year On Record In Over A Century – What’s Next?

Copper Leads the Commodity Charge Amidst Soaring Demand and Shrinking Supply

From Gold, Silver, Copper, Natural Gas to Orange Juice – Commodity prices across the board are on an absolute tear – firmly position the entire the sector on track for its two biggest consecutive quarters on record in over a century!

Right now, you certainly cannot talk about the Commodity Supercycle without mentioning Copper – And that’s because the world’s most sought after metal is breaking new records, almost on a daily basis.

On Tuesday, Copper prices trading on the New York Comex exchange surged to a new all-time record high of $5.17 per pound. While, Copper prices trading on the London Metal Exchange blasted above $11,104 a ton, surpassing the previous record high set in March 2022.

According to GSC Commodity Intelligence – the boom in Copper prices is being fuelled by a magnitude of bullish macro tailwinds, one of which is red-hot demand for the metal to power energy transition and artificial intelligence technologies.

Data centres to power AI servers will require an additional 1 million metric tons of Copper over the next three years. Additionally, new demand is also expected to come from electric vehicles, which are built with four times more Copper than vehicles with internal combustion engines.

As demand surges and the world needs more Copper and lots of it fast – there’s one big problem!

Global supply is shrinking at a record pace off the back of a “triple deficit” – low inventories, low spare capacity and low investment.

All of this means one thing – the Copper market is only going to get tighter and that will inevitability push prices a lot higher from current levels.

Copper isn’t the only Commodity soaring this year due to the booming AI revolution and global race to construct large data centres to handle and process the vast amount of generated data.

Coppers unstoppable upside momentum has been replicated by another very high in-demand Commodity.

Natural Gas Powers Ahead as Essential Fuel for Data Centres Amidst Commodity Boom

And that’s Natural Gas.

Data centres need reliable, uninterruptible power to function 24/7. Renewables energy such as solar and wind, even when backed-up by batteries, cannot provide that on their own. While this remains a major challenge for the sector – Natural Gas is the only alternative fuel offering reliable, steady, power at scale, with almost 50% less emissions than coal.

On Tuesday, U.S Natural Gas prices topped $2.75/MMBtu – tallying up a whopping gain of 42% since May 1.

In total 47 Commodities ranging from the Metals, Energies to Agriculture have registered new multi-year and all-time record highs within the first 5 months of this year.

And this could just be the beginning!

Whichever way you look at it, one thing is clear. The macroeconomic backdrop for Commodities in 2024 is looking more bullish than ever before – and it certainly won’t take much for prices to breach new highs in the coming weeks, if not days ahead.