Commodities super-cycle is 'taking a break'
Runaway prices in commodities markets have ended, but long-term demand for commodities on the mainland is strong
The commodities "super-cycle", largely buoyed by Chinese buying, may have ended in terms of runaway prices but robust demand is expected to continue.
A more benign price outlook would benefit large commodities consumers and importers like China as it would help contain inflation and promote economic growth.
Eugen Weinberg, head of commodity research at Commerzbank in Germany, said: "Price movements in the market indicate an end to the commodities super-cycle. But we do not believe the super-cycle is coming to an end. It's just taking a break.
"Some 20 million people a year move from the countryside to the cities, triggering a huge demand for better infrastructure."
Michael Haigh, global head of commodities research at the French bank Societe Generale, said: "We do not think the current commodity super-cycle is over, but it is not as super. It is common to have cycles within super-cycles."
We do not think the current commodity super-cycle is over, but it is not as super. It is common to have cycles within super-cycles
The super-cycle that began around 2002 was driven by a combination of strong demand from emerging nations and low supply growth. Since last year, growth in global demand has weakened as a result of the sovereign debt crisis in many developed nations, while new supply caught up with demand because of strong investment during the latter years of the boom.