After a long dry spell, there are increasing signs that commodities may be on the verge of a new supercycle. The combination of dwindling supply, rising demand due to the energy transition and digitization, and geopolitical tensions is creating an environment conducive to a sustained rise in prices.
A look back shows that previous supercycles were always triggered by major upheavals – the oil crises and loose monetary policy of the 1970s, or China’s gigantic urbanization drive in the 2000s. Today, there are other drivers, but in total they could unleash a similar dynamic.
Supply bottlenecks and geopolitical levers
On the supply side, it is clear that the world is dependent on a few regions: Chile and Peru supply over 40% of the world’s copper, Australia and Brazil dominate the iron ore market, and Kazakhstan accounts for around 40% of global uranium production. In addition, China has an almost monopolistic position in processing – for example, in rare earths or in copper refining.
The downside of this concentration is that raw materials are increasingly being used as geopolitical leverage. For example, in 2025, China temporarily restricted the export of rare earths. At the same time, trade agreements are increasingly being linked to energy security – as with US LNG supply contracts with the EU or South Korea. This creates a permanent risk buffer in the markets that can be released at any time in the form of price shocks.
To make matters worse, the easily accessible and high-grade deposits have largely already been developed. New projects are expensive, ore grades are falling, and approval processes take years, often more than a decade. Many large mining companies have also preferred to pay out dividends for a long time instead of investing in new projects – which has further widened the supply gap.
Demand Boom Due to Energy Transition and AI
On the demand side, global electrification is providing tailwind. The expansion of renewable energies, power grids and electromobility is consuming enormous quantities of copper, silver and other metals. Copper is now considered a “critical mineral” – according to the International Energy Agency, a supply gap of around 30% could already emerge by 2035 if massive investments are not made.
But it is not only the energy transition that is creating pressure. The major tech companies are also investing hundreds of billions of dollars annually in data centers for artificial intelligence. These facilities consume vast amounts of electricity – and thus also metals for grids and infrastructure. For the companies, access to energy and raw materials is existential, which makes demand more resistant to crises.
Tailwind from the Financial Side
Interestingly, many commodities – adjusted for inflation – are still far from previous highs. Oil and the broad Bloomberg Commodity Index are around 70% below their peak values from 2008, copper is trading around 30% below the high from 2011. The stock markets are completely different: The S&P 500 has almost tripled since the financial crisis – even after inflation.
At the same time, bonds are increasingly losing their function as a hedge in the portfolio because inflation remains persistent and central banks have little room for aggressive interest rate cuts. This opens the door for commodities as new stabilizers in portfolios – gold has already regained this role.
Conclusion: there are many Indications of the Beginning of a New Supercycle
Although the exact starting point is difficult to determine, the mixture of circumstances shows parallels to earlier supercycles. Once the dynamic gets going, it often lasts for years – usually only ended by drastic measures such as the interest rate shocks of the 1980s or technological leaps such as US shale oil.
The mix of tighter supply, structurally growing demand and geopolitical risks could now provide exactly the ingredients that trigger a new commodity supercycle. For investors, this means that commodities could soon move back into the center – not only as inflation protection, but also as a strategic growth driver.
