Growing Demand, Tight Supply Support Commodities in 2023

Investors may be wondering how long commodities markets can sustain the rally they’ve been on since the spring of 2020. Higher interest rates and decelerating growth (and potential recession) in key developed markets are likely headwinds in 2023. However, China’s rapid reopening alongside post-pandemic demand growth globally, plus supply-side factors including persistent low inventories and the uncertainty around the Russia-Ukraine war, bolster the case for continued high commodity prices over the coming year. Looking longer term, a prolonged period of limited supply-side investment along with...