The Resource Rumble: Commodities Make a Comeback

Commodities have been through a lost decade, scarred by underinvestment and overshadowed by the runaway success of equities and tech. But markets have a way of turning when the fundamentals quietly align, and the signals are growing louder that the world may be on the cusp of another super cycle. The last time commodities surged in unison, China was urbanizing at breakneck speed and oil producers held extraordinary sway over global markets. Today, a different mix of drivers, geopolitical rivalry, the green energy revolution, and relentless technology buildouts, could ignite the next long wave.

Fragile Supply Lines 

At the core of this potential shift lies supply. For decades, miners and oil producers have leaned on deposits discovered in easier times. Those days are fading. The richest copper, iron ore, and uranium grades are largely exhausted, leaving the industry chasing lower-quality ore, facing steeper costs and ever longer lead times. Greenfield projects now routinely span a decade or more before producing meaningful volumes. Meanwhile, shareholder demands for dividends have restrained investment in new capacity, leaving the pipeline perilously thin. As Vicki Hollub, CEO of Occidental Petroleum, has warned, "We're in a situation now where in a couple of years time we're going to be very short on supply." This sentiment echoes across sectors, with companies like Freeport-McMoRan navigating escalating costs in their copper operations amid global shortages.

Geopolitical concentration only magnifies the risks. Chile and Peru together account for more than 40 percent of the world’s copper. Kazakhstan dominates uranium, while Australia and Brazil control iron ore. On the refining side, China is unrivaled, processing nearly 90 percent of rare earths and over 40 percent of global copper. These choke points turn supply into a bargaining chip. Beijing has already demonstrated its willingness to use export restrictions during disputes, while Washington has folded long-term LNG commitments into trade negotiations. Resource nationalism is no longer a fringe concept but a strategic reality.

Under the Trump administration's renewed "America First" policies, this dynamic is intensifying. Since January 2025, executive orders have targeted critical minerals like copper, cobalt, and graphite for national security reasons, invoking Section 232 tariffs on imports to bolster domestic production. Reciprocal tariffs, starting at 10-20 percent baselines and higher on adversaries like China, aim to protect U.S. firms and reduce reliance on foreign chokepoints. This shift could accelerate supply disruptions globally, favoring American players such as U.S. Steel in iron ore and metals, while pressuring international rivals. As the administration expands its 2025 critical minerals list to include refined copper, the stage is set for higher prices and reshaped trade flows.

Demand That Will Not Wait 

On the demand side, the picture is even clearer. The global electrification drive is metal-intensive on a historic scale. Copper, the backbone of wiring and grid infrastructure, is indispensable for electric vehicles, wind farms, solar projects, and power-hungry data centers. The International Energy Agency has warned of a potential 30 percent copper shortfall by 2035 if new supply does not materialize, a gap that would shake industrial supply chains worldwide. Robert Friedland, founder of Ivanhoe Mines, underscores this urgency, stating that copper demand is "essentially infinite" as military and technological needs escalate. His company's Kamoa-Kakula project in the Democratic Republic of Congo exemplifies the push into new frontiers to meet this insatiable appetite.

Technology firms, flush with cash, are investing hundreds of billions into artificial intelligence and cloud computing facilities. Their appetite for energy and raw materials is not cyclical but existential. Microsoft CEO Satya Nadella has highlighted how AI's evolution demands more metals and energy, noting that "the way technology's evolving, it's more and more energy-intensive, and more and more metals-intensive." Without copper, lithium, rare earths, and nickel, the AI revolution grinds to a halt. Unlike past booms driven by speculative demand, this surge is anchored in structural necessity. The collision between thin supply and insatiable demand is the hallmark of a super cycle in the making, with diversified miners like BHP Group ramping up nickel and copper investments to capitalize on the EV and tech boom.

The Financial Undercurrent 

Commodities are also cheap relative to history. Adjusted for inflation, copper trades 30 percent below its 2011 peak. Oil and the broader Bloomberg Commodities Index are still languishing far below the highs of 2008. By contrast, U.S. equities have surged to repeated records, tripling since before the global financial crisis. That imbalance is striking. Vitol CEO Russell Hardy anticipates oil prices holding steady in the $70 to $80 per barrel range through 2025, amid ongoing geopolitical uncertainties. Energy giants like ExxonMobil are leveraging long-term LNG deals to navigate this landscape, positioning themselves as key players in the transition.

Investors may soon be forced to rethink portfolio construction. With inflation proving stubborn and central banks limited in their ability to slash rates, bonds are losing their role as a reliable hedge. Commodities, particularly gold and industrial metals, are emerging as alternative anchors. Central banks are already buying gold at a historic pace, reflecting unease over fiat currencies and geopolitical uncertainty. Institutional investors have been slower to move, scarred by the bear market of the last decade, but history suggests that once capital begins to flow into commodities, momentum can build rapidly. Streaming companies like Wheaton Precious Metals are well-placed to benefit from this gold rush, offering exposure without direct mining risks.

A Cycle That Lasts

Super cycles do not turn on a dime, nor do they fizzle out quickly once underway. The oil shocks of the 1970s reshaped economies for years, just as China’s urbanization fueled a decade-long surge in metals and energy. Breaking such cycles requires extraordinary policy interventions or disruptive technologies, the kind of measures Volcker’s Fed delivered with sky-high rates in the 1980s, or the shale revolution unleashed in the 2010s. Absent such seismic shifts, the ingredients now gathering could sustain higher prices across the commodity spectrum for years to come. Friedland warns that a stable $15,000 per ton copper price may be needed long-term to spur the massive new mines required, signaling a "crisis" if supply lags.

Conclusion

The world has changed since the last commodity boom, but the forces driving the next one are no less powerful. Tight supply, geopolitical weaponization of resources, including the Trump administration's tariff-driven focus on domestic and allied minerals, the electrification megatrend, and shifting financial winds are aligning into a potent cocktail. Timing is always uncertain, but the foundations of a new super cycle appear to be falling into place. Investors and policymakers who ignore the signs may soon find themselves scrambling to catch up, with U.S.-centric firms like U.S. Steel potentially leading the charge in a revitalized American commodities sector.