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Tiagong, Commodity price will continue to be High High Kiss the sky, at least for a foreseeable future
- Thread starter k1976
- Start date
- A commodity “super squeeze” is denoted by higher prices driven by supply constraints more than a robust growth in demand, according to HSBC’s chief economist Paul Bloxham.
- Geopolitical risks include the ongoing Israel-Hamas conflict in Gaza and the Ukraine war, which have hampered global trade, as seen in shipping disruptions from the recent Houthi attacks in the Red Sea.
- Another reason is climate change, which disrupts supply chains as well as commodities supply, especially in the agricultural space.
A commodity “super squeeze” is denoted by higher prices driven by supply constraints more than a robust growth in demand, he explained.
“If it’s a supply constraint that’s driving high commodity prices, it’s a very different story for global growth,” said via Zoom. Higher prices as a result of a super squeeze are “not as positive.”
“We see the deeper ‘super-squeeze’ factors on the supply-side as still set to play a key role in keeping commodity prices elevated,” he said, outlining factors like political uncertainties, climate change and the lack of investments into the green energy transition.
“If it’s a supply constraint that’s driving high commodity prices, it’s a very different story for global growth,” said via Zoom. Higher prices as a result of a super squeeze are “not as positive.”
“We see the deeper ‘super-squeeze’ factors on the supply-side as still set to play a key role in keeping commodity prices elevated,” he said, outlining factors like political uncertainties, climate change and the lack of investments into the green energy transition.
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