London copper futures are trading north of $14,700 a ton, Brent crude futures have climbed above $101 a barrel, US diesel crack spreads are back in triple-digit territory, and the Bloomberg Commodity Index is at a 14-year high. The energy shock has broadened into a rally across the commodity complex, from energy to agricultural products to metals and other critical materials, with a growing number of Wall Street research desks identifying tightening physical supplies as a key driver.
HSBC chief economist for global commodities Paul Bloxham is the latest to warn that a "super-squeeze" in commodity markets continues to produce outsized gains.
"The 'super-squeeze' has continued to support elevated commodity prices … as the Iran and Russia-Ukraine wars and El Niño disrupt supplies … and AI and electrification drive demand," Bloxham wrote at the start of the note. "Prices are expected to remain elevated, and there are upside risks."
To illustrate the broad-based surge in commodity prices, the Bloomberg Commodity Index is now at levels last seen in 2012, marking a 14-year high...
... while the Quantix Commodity Index has hit a new record high.
Bloxham told clients to focus on these ten themes:
1) A'super-squeeze' continues …
Six months after the Middle East conflict began, it is still
