There is an old story about a factory that grinds to a halt. Engineers spend days diagnosing the machinery. Eventually, a specialist is called. He walks the floor, listens, taps a single screw, and the plant roars back to life. His invoice reads: one screw tightened, £1. Knowing which screw, £9,999.
That is the investment problem of the moment. The fourth Industrial Revolution is generating enormous noise, almost all of it directed at software, platforms and AI. The golden screw, the thing that actually makes the whole machine run, is somewhere else. It is in the commodites, the materials layer.
The first Industrial Revolution was not won by James Watt. It was won by Matthew Boulton, who provided the capital and the manufacturing base, and by the Darby family, whose coke-fired furnace at Coalbrookdale made the steam engine scalable. The fortunes of the 18th and 19th centuries went to those who owned the feedstock, controlled the refining, and waited for the world to need what they had: Sheffield steel, Coalbrookdale iron, town gas infrastructure, canals. The inventors were celebrated; the owners of the enabling layer were the ones who compounded.
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Start your trial
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Commodities are where the scarcity lies
We are in the same moment now. The software layer of the fourth Industrial Revolution is commoditising rapidly. The hardware layer, – chips, data centres and power systems – is capital-intensive but replicable. The materials layer is where scarcity lives, scarcity is where pricing power lives, and pricing power is everything in a prolonged stagflationary environment. The golden screws we are focusing on for 2026 are uranium, tungsten, helium and, unfashionably, coal.
Latest Videos FromMoneyWeek
Uranium is the foundational fuel of the AI age. Data centres require baseload power that intermittent renewables cannot reliably provide. The global reactor-building programme is accelerating across the US, UK, France, Japan, South Korea, Poland and the UAE. The critical bottleneck is not mining; it is conversion and enrichment.
The Western world's dependence on Russian enrichment capacity is a strategic liability now being addressed at enormous cost, and the opportunity lies across the full value chain – conversion, enrichment, fuel fabrication, and the qualification of non-Russian fuel for Soviet-era reactors across Eastern Europe. The spot price cycle is still early. Term contracts between utilities and producers have only partially repriced.
Why tungsten is today's Sheffield steel
Tungsten has no substitute in its primary applications: cutting tools, armaments, superalloys and semiconductor manufacturing equipment. China controls 80% of global supply and has shown both the willingness and the capability to weaponise that through export restrictions. Western primary production is negligible. Demand from the defence sector is structural and inelastic. Nato's rearmament drives a decade-long demand cycle.
The refining bottleneck, the production of ammonium paratungstate (APT) – the main industrial intermediate and global benchmark for pricing tungsten – is where the real opportunity sits. Western APT capacity is close to zero. Sheffield in the 1780s controlled the world's precision metalworking because it controlled the refining of specialist steels. Tungsten is today's Sheffield steel.
Helium is irreplaceable, non-renewable on any practical timescale, and priced well below its strategic importance. It is essential for MRI machines, semiconductor lithography, rocket propulsion and as a quantum computing coolant. The US government reserve that backstopped global supply for decades is being wound down. Disruption to Russian supplies has already tightened the market. The value lies not in extraction but in the liquefaction and purification infrastructure, the golden screw of the helium value chain, which is nascent, capital-intensive and extremely difficult to replicate quickly.
Coal, particularly metallurgical coal, is the most stigmatised asset in the investment universe and, for that reason, is one of the most interesting. Green steel is real but distant. Blast-furnace steel remains dominant for structural and infrastructure applications through to 2040 at minimum.
Divestment driven by environmental and social governance (ESG) has concentrated ownership among private operators with longer time horizons and lower capital costs, starving the asset class of new supply while demand from India, Southeast Asia and Africa continues to grow. The British parallel is instructive: in the 1780s, coal was the despised fuel of the poor. Within 40 years, it was the foundation of the empire.
The macro context amplifies all of this. We are in a regime where rates stay higher for longer, while the combination of fiscal excess and supply constraints is structurally inflationary, regardless of central banks' intent.
Passive index exposure will not protect capital in this environment. Genuine conviction, expressed with concentration in businesses with pricing power, hard assets or irreplaceable niches, is the correct posture. Private-credit stress, already visible, will accelerate as liquidity mismatches surface. The Yale endowment model, built for a falling-rate, liquidity-abundant world, is not fit for purpose in this one.
Investors who understands this are not making a contrarian bet. They are making the same bet that built the great fortunes of the 18th and 19th centuries – own the feedstock, control the refining, and wait for the world to need what you have.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
