A great bear market in raw materials

published 23 July 2015

15-4-23-tractor-634 — A bumper US harvest has hit grain prices

Last decade's long bull market in raw materials, often called the "commodities supercycle", is now a distant memory. This week the Bloomberg Commodity index, which tracks 22 hard and soft raw materials, fell to a 13-year low. It is down by almost 60% from its 2008 peak.

"You've got unstinting supply increases and a weak outlook for demand across the board," said Michael McCarthy of CMC Markets. Annual growth in China, whose appetite for metals underpinned the supercycle, has fallen to 7%, the lowest since 1990. The recent stock- market meltdown has revived fears of a hard landing. The global picture looks lacklustre too, with the International Monetary Fund trimming its 2015 global growth forecast from 3.5% to 3.3%.

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Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.